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HSBC: Stock Prices in Vietnam Now Attractive   2008-06-04 - Vneconomy

Nhìn chung, quan điểm của HSBC về thị trường Việt
Nam vẫn là lạc quan trong dài hạn.

The Hong Kong and Shanghai Banking Corp. (HSBC) has released its latest monthly report about Vietnam’s economy, which advises investors not to sell at this moment, and those who are going to join the market, to wait for some more time to buy stocks at lower prices.

 

In the previous report, HSBC’s experts said that the VN-Index reached its bottom at 500 points. However, the market continued falling in all trading sessions in May. The VN-Index has lost 55% since the beginning of the year, and 65% since March 2007, when the stock market hit its highest peak.

 

According to HSBC, in May, the indices of Vietnam’s stock market continued worsening. The total market capitalization value of both the Hanoi and HCM City bourses has dropped to US$15 billion, while the figure was US$23 billion last September. Currently, Vinamilk is the only share item which has the market capitalization value of over US$1 billion.

 

The daily average trading volume has also been decreasing considerably to US$11 million/day on HCM City bourse, and US$6 million/day on Hanoi bourse, much lower than US$82 million and US$30 million obtained last October.

 

However, it is interesting that in May, foreign investors continued purchasing Vietnamese stocks with the purchase value of US$132 million. It is because most of the investment funds in Vietnam are closed funds. Many of the funds mobilized capital last year which they planned to disburse for big IPOs. However, as the big IPOs have been delayed, the funds have decided to purchase cheap stocks at this moment.

 

Meanwhile, domestic investors are trying to sell stocks to stop losses in the context of the falling stock market. A lot of investors have quit the stock market to make investments in gold or make bank deposits.

 

HSBC’s report said that Vietnamese stocks now prove to be very attractive with very low prices. The P/E of the stocks on HCM City bourse is now 11. If the EPS is 10% this year (last year, HSBC predicted the figure would be 20%), the P/E will be 10.5 in 12 months, the lowest P/E in the young history of Vietnam’s stock market.

 

The report said that investors are still not worried about the devaluation of the VND.

 

In general, HSBC is optimistic about Vietnam’s stock market in the long term. However, the coming quarters will be difficult. The report said that investors who have injected money in stocks should not sell stocks at this moment. Meanwhile, those who are going to join the market should wait for a little bit longer to be able to buy stocks at lower prices.


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