Stock Market Definitely Cheap Now: PXP Vietnam Asset Management

The deep downtrend of Vietnam's stock market has made local shares rather cheap and it is good time to buy in, PXP Vietnam Asset Management told clients in a monthly note.

 

The Ho Chi Minh Stock Exchange’s VN-Index lost 15.8 per cent last week and total 26.4 per cent since the beginning of this year, including a 4.6 per cent tumble February 21, the biggest one-day decline since 2006.

 

The market slump has brought prices down to about 15 times projected 2008 earnings, PXP Vietnam Asset Management said.

 

If the figure compares to a P/E ratio of about 20 as the end of 2007, the prices are not expensive, said Kevin Snowball, director of PXP Vietnam Asset Management.

 

“The market is now definitely cheap,” affirmed the Dublin-listed Vietnam Lotus Fund, adding that it is good time to begin to buy.

 

The market decline last week was driven by domestic investors who are in great fear of low prices due to State Bank's move to withdraw liquidity from circulation in a strong bid to slow inflation rate. Meanwhile, foreign investors were net buyers, the Vietnam News reported Monday.

 

The VN-Index may rise to 1,000 points by the end of the year, on the prediction that the government starts to get inflation under control, Snowball said.

 

Currently, Vietnam Lotus Fund are holding great number of shares in HOSE-listed companies, including Imexpharm Pharmaceutical JSC (IMP), General Forwarding & Agency JSC (Gemadept); and Hau Giang Pharmaceutical JSC (DHG). (Young People)