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Vietnam stock market world’s second best
06/08/2010 - 223 Lượt xem
From a market capitalization – the total value of all the shares listed on the exchange – of US$144 million two years ago, it has increased more than tenfold, to $1.5 billion.
"It's starting from a very low base; so you have nowhere to go but up for the next three to five years," says Don Lam, who runs VinaCapital in Ho Chi Minh City and operates the largest fund through which foreigners can invest in Vietnamese stocks, the $300 million, London-listed Vietnam Opportunity Fund.
Factors fueling Vietnam's stock boom include a fast-growing economy (8.4 percent in 2005); reforms allowing foreigners to hold 49 percent of public companies; and a push to encourage state-owned companies to go public.
"Things have changed a lot in Vietnam," says Lam.
Expectations are for the total market cap to double again by the end of this year.
However, Tran Dac Sinh, CEO of the Vietnam Stock Exchange, says Vietnamese companies are undervalued by global standards.
He says the overall market price-to-earnings (PE) ratio is just 11.9 compared with 18 for China.
The PE ratio of a company is its market price expressed as the number of times its net profit per share.
Source: Fortune Magazine
