VietNamNet Bridge - The P/E (price-earnings) ratio of the Vietnamese stock market is 14.3, while the figures are 16.5 in Thailand, 22 in Indonesia, 15.8 in Malaysia and 14.7 in China.

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The VN Index on September 23 rose to 674.09 points, or by 30 percent in comparison with earlier this year with the improved liquidity. Analysts put emphasis on the P/E ratio of 16.49, a record high in the last five years. 

Doanh Nhan Sai Gon commented that the strong recovery of the national economy backed the VN Index escalation. Some listed companies have reported considerable improvement in business results.

The shares of retail companies witnessed the sharpest increase of 81.17 percent, while healthcare companies had 74 percent, household-use goods 64 percent and construction & building materials 60 percent.

Meanwhile, considerable decreases have been reported by oil & gas shares (-19.7 percent), financial services (-13.24 percent) and banking (-9.8 percent).

With the average P/E ratio at over 14.3, the gap between Vietnam’s P/E and other regional countries, and between Vietnam’s and the US (16.5) and Europe (20.7) has been narrowed. 

With the average P/E ratio at over 14.3, the gap between Vietnam’s P/E and other regional countries, and between Vietnam’s and the US (16.5) and Europe (20.7) has been narrowed. 
As such, the cheap-stock period of the Vietnamese stock market is over, and its status has shifted from frontier to emerging. 

Vietnam’s P/E ratio index is influenced by the performance of Large Caps such as VNM, MSN, FPT, VIC, VCB and BVH. The group of shares pushed the last VN Index upward movement and account for a large proportion of VN Index’s capitalization value.

Dau Tu Chung Khoan also quoted experts as commenting that with the new price levels, Vietnam’s stocks are no longer ‘too cheap’ compared with Thailand, the Philippines and China.

While 90 listed reported loss in the first quarter of the year, only 69 out of 687 businesses which have released Q2 financial reports so far reported loss. In the first quarter, listed companies reported modest profit growth rate of 1 percent, while the figure was 1.6 percent in the first half of the year.

The statistics showed that listed companies have made considerable improvement in their business performance. 

Official reports showed that profits made by the 20 most profitable businesses were between VND500 billion (SSI) and VND6 trillion (VNM). The losses were between VND30 billion (PVV) and VND1.1 trillion (TTF).

The strategic report by Ban Viet Securities Company (VCSC) showed that the upward trend in the first half of the year was not a ‘bubble’, and that the P/E increase is in line with the trend in the region.

The increased P/E will reduce the attractiveness of Vietnam’s stocks in foreign investors’ eyes. Therefore, Vietnam needs to develop many other tools to attract foreign capital.
Mai Chi