VNDirect Securities Company (VNDS) has released a new report about Vietnam’s stock market, which says that the P/E ratios in 2008 were 13x for the HCM City Stock Exchange, and 10x for the Hanoi Securities Trading Centre. Meanwhile, the estimated P/E ratios in 2009 are 10x for HOSE and 8x for HASTC, attractive levels compared to those of other regional countries.


It is latest report, released on April 21, VNDS wrote that it can see signs of the national economy’s recovery in the relatively high credit growth rate (2% per month).


According to VNDS, credit in March increased significantly in comparison with the first two months of the year. VND deposit interest rates have been on the increase, while the capital mobilisation growth rate has also increased, which should be seen as signs that commercial banks have found outlets for capital. Commercial banks have set ambitious targets for credit growth in 2009, at 30-90%, which means that they will have to speed up to fulfill their business plans.


In the world, though developed economies like the US, EU, Japan and Singapore are still sliding, there have been signs of the re-stabilisation of the banking system and the real estate market. However, Vietnam’s foreign direct investment and GDP will not be able to grow strongly again until the markets’ recovery.


Meanwhile, China is recovering rapidly with good credit, export and GDP indexes for the first quarter of the year, which have made people believe that Q1 was the bottom line of the crisis of the third-biggest economy in the world.


Vietnam’s securities expensive or cheap?


VNDS estimates that the P/Es in 2009 will be 10x for HOSE and 8x for HASTC, which it believes are attractive levels in comparison with other regional countries. Prior to that, the Hong Kong and Shanghai Banking Corporation (HSBC) said that the P/Es in 2009 of some Asian markets would be between 12x and 15x.


Regarding the market’s prospects in the medium and long term, VNDS’ experts believe that thanks to the recovery of the national economy, Vietnam’s stock market will continue on the path to recovery.


Opportunities for new investors


It is now the high season of shareholders’ meetings and finance reports for Q1. A lot of companies have reported good information about their business results, including [url="http://www.vietstock.com.vn/vstfinance/StockDetail.aspx?scode=ACB&q=ACB" target=_blank>ACB, STB, VNM, and DPM, HAG, HPG, PPC and VNDS, the market has been decreasing after it saw a little recovery in previous trading sessions. The blue chips like SSI, BVS, KLS, ACB, and VNDS, the falling prices have brought new opportunities to investors. They now can purchase stocks of the companies which showed impressive business results in Q1 at low prices.