According to a report by the Bloomberg news agency, the VN Index rose 3.8 percent Friday to close the week at 591.4, topping Thursday's 571.2, which had been the highest close since June 2001.

The index, which includes all companies listed on the Ho Chi Minh City Securities Trading Center, has surged 92 percent this year, pushing the market value of the bourse past $1.9 billion.

Kinh Do, a maker of bakery items, listed in December as what was then the exchange's biggest stock.

In January, Kinh Do was trumped by Vietnam Dairy Products, known as Vinamilk, whose listing doubled the bourse's market value. Vinamilk is the country's top milk producer and also plans to build a beer plant in Vietnam together with SABMiller.

"Kinh Do is a major local brand name, and everyone knows Vinamilk, which has solid profits," said Horst Geicke, chairman of VinaCapital, manager of the London-listed Vietnam Opportunity Fund. "The Merrill Lynch report brought more foreigners in, though I don't know how much impact it had on local investors."

Merrill Lynch's 52-page February report said economic growth, policy changes, and the Vietnam's capital market "demand attention," terming Vietnamese shares a 10-year buy.

"In late November and early December, I was marketing in the US predominantly to hedge funds, and I started to get questions about Vietnam," said Spencer White, chief equity strategist for the Asia-Pacific region for Merrill Lynch, in a March 15 interview in Hanoi. "It was the first time anyone had ever asked me about Vietnam."

Foreign investors' interest was piqued in October, when the Vietnamese government raised $750 million in its first sale of foreign-currency denominated debt.

In February, Intel said it would invest as much as $605 million in Vietnam, and a unit of Taiwan's Ta Ya Electric Wire & Cable sold shares of its Vietnamese unit on the exchange, the first listing on the bourse by a foreign company.

At the Ta Ya listing, Ho Chi Minh City Securities Trading Center Director Tran Dac Sinh told journalists that by June Saigon Thuong Tin Commercial Joint Stock Bank would probably become the first bank to list on the exchange.

Source: Bloomberg