Banks in Vietnam have long suffered under a cloud of bad loans, dampening credit growth, but now CIMB believes that will send the stock market sharply higher.
It's about falling interest rates.
"Falling inflation and aggressive purchases of Vietnam government bonds (VGBs) by banks have pushed down yields," CIMB said in a note last week, noting that the 10-year VGB yield is down around 260 basis points so far this year.
While the bond purchases are a sign that banks are still too risk averse to lend to customers, "falling yields help stock prices in a variety of ways, even if they are caused by weak credit growth, which is, in turn, dampening domestic demand," CIMB said.
How much help might stocks get? CIMB expects shares to climb 25-30 percent next year, in addition to the index's around 23 percent gains so far this year.