Chinese consumers can be a big growth driver in Asian markets(2)

Observers expect the through train program to benefit both sides. On the one hand, the outflows of capital out of China could grow as investors pour money into more transparent Hong Kong stocks. This could help with the ongoing internationalization of the yuan. A recent study by the Bank of England suggested China's gross international investment position could increase from 5 percent to over 30 percent of global GDP by 2025.

If successful, the through train program could lead to the inclusion of Shanghai A shares (denominated in yuan) in global stock indices as early as 2016.

Such inclusion could generate as much as $8.3 billion in new demand for these stocks, says Francis Cheung, head of Mainland-Hong Kong strategy at investment brokerage CLSA.

Credit Suisse's head of China research, Vincent Chan, agrees that the inclusion would increase the internationalization of the A share market, but says the impact of the internationalization of the Asia market is likely to be more limited until Chinese institutional investors become big investors in overseas markets.

"For global investors, their investment interests in China could largely be satisfied by China stocks listed in Hong Kong and the US," says Chan. "Global investors are definitely interested in the program, but they still have some hesitations in areas like taxation, foreign ownership and settlement."

Will Stephens, Deutsche Bank's Asia synthetic equity and derivatives strategist, says the MMA is a "significant opportunity for regional and global investors" and will help drive liquidity coming into the region.

As the links between China and markets in the region grow, developments in one increasingly have an impact on the other.

Marc Faber, a long-time Asia-focused investor and author of the Gloom, Boom & Doom report, expects markets in Asia, like those in Vietnam, to start posting strong performances.

Asian markets are down about 50 percent, on average, from the peaks they reached in 2007. Meanwhile those in the United States continue to set records, almost on a daily basis.

It is conceivable, he says, that bourses in developed markets will start to come down and "markets like Vietnam start to grow".

"The export performance of Vietnam has been the best of the emerging markets," he says.

With much of the population of the world living in emerging markets "this is where the future opportunities will be".

A big driver of the growth in Asian markets like Vietnam will be the Chinese consumer market, which "has risen faster than in any country in the history of the world", Faber says.

As things stand today, the valuations of listed companies in Vietnam are not only reasonable but attractive, and a slow but inexorable push toward markets opening up will help investors take advantage of these opportunities.

Investors in Asia, particularly China, are likely to benefit first, not only because that is where much of the foreign direct investment is coming from but also as a result of deals like the one between ASEAN stock markets or the through train program between Shanghai and Hong Kong.

"The big opportunity for Vietnam is in China, not the US or Europe," says Faber.

Don Lam, founding partner of Vietnamese asset management firm VinaCapital, agrees. Foreign investors, he says, are likely to pour into markets like Vietnam. But while Europeans are cautious, Asian investors are more bullish.

"Vietnam has received the highest FDI commitments of all countries in Asia except China and India," he says.

With valuations that are cheaper than elsewhere in the region, stability and the prospects for greater openness, stock markets in Vietnam are poised for growth.