Vietnam’s corporate earnings may expand by about 20 percent next year, helping to sustain Asia’s best-performing stock market over the past six months, according to Manulife Vietnam Fund Management.

Profit growth in 2010 will be “cleaner” after increases of some 30 percent this year partly because of gains from revaluations, Mark Canizares, Manulife Vietnam’s head of equities, said in a Bloomberg Television interview in Singapore. While the stock rally may prompt “some correction,” the outlook remains “strong,” he said.

Vietnam’s VN Index, the benchmark measure of the Ho Chi Minh City Stock Exchange, has more than doubled from this year’s low on Feb. 24, leaving it 51 percent below its 2007 peak. Its 110 percent gain over six months is the most in Asia and fourth- best among 91 indexes tracked by Bloomberg globally.

“Most are seeing this year as a year of recovery,” said Canizares, who helps oversee $300 million of investments at Ho Chi Minh City-based Manulife Vietnam. “It’s a year where companies refocus on what they are doing. Going into 2010, we’ll see quality earnings come again.”

The VN Index is valued at about 20 times this year’s earnings and about 18 times 2010 profits, Canizares said. That compares with a multiple of 23 times for the MSCI Asia-Pacific Index, based on earnings estimates this year, according to data compiled by Bloomberg.

Seafood exporters

Shares of seafood exporters are among those favored by Canizares, who said the companies may benefit from a global economic recovery and because their average valuations are lower than the broader market.

Manulife also favors property developers and consumer-related stocks including Kinh Do Corp., the biggest listed confectionery maker, and Vietnam Dairy Products Joint- Stock Co., the dairy company known as Vinamilk, he said.

The VN Index has gained 107 percent since Feb. 10, when Canizares said “we still believe that Vietnam is one of the markets which has the potential to grow.”