Exports jumped 13 percent in October, more than twice the pace in China, and pledged foreign direct investment surged 66 percent to $19.2 billion in the first 10 months of the year. The central bank has cut its refinancing rate eight times since the beginning of 2012 as inflation dropped to a 14-month low. 

The government predicts economic growth will accelerate to 5.4 percent this year and 5.8 percent in 2014. Gross domestic product rose 5.25 percent in 2012, the slowest pace in 13 years, International Monetary Fund data show.

Vietnam's Communist Party, which has ruled over the reunified country since 1976, is revising the constitution. A draft version dated Nov. 17 on the National Assembly's website indirectly acknowledges the private sector while saying the state will maintain its “leading role” in the economy.

“There are a lot of positive things happening that are going to push the market higher over the next few years,” Patrick Mitchell, the head of institutional sales at VinaSecurities JSC, said in an e-mailed statement from Ho Chi Minh City on Nov. 19. “The charts on Vietnam are steadily moving upwards.”

Eoin Treacy's view

Vietnam experienced what might be described as growing pains as the rate of economic growth overtook the ability of existing physical and regulatory infrastructure to cater to it. This resulted in an inflation problem and repeated devaluations of the Dong before fiscal consolidation and a concerted effort to reform were introduced. The Dong has been stable near VND21,000 since 2011 suggesting the process of devaluation has ended.

The Vietnam stock market Index has been ranging above the 200-day MA for most of the year and is firming from that region once more. This consolidation and the fact that it is taking place following a three-year downtrend has first step above the base characteristics. A sustained move above 525 would confirm a return to medium-term demand dominance.

The UK listed Vietnam Opportunity Fund's discount to NAV has compressed from a - 33% in October to today's 25%. It has already broken out of its first step above the base. The US listed Market Vector Vietnam ETF isn't doing a particularly good job of tracking the market.