Salient to Investors:
Andy Ho at VinaCapital Investment Mgmt, Vietnam’s biggest fund manager, said the Vietnam stock market will rise steadily in 2013 to reflect an economic expansion of between 5 percent and 6 percent. Ho likes basic sectors that contribute to the growth of the domestic economies, like pharmaceuticals, education and agriculture. Ho said inflation is tamed and so there is plenty of room to loosen monetary policy, while a young and growing population of 90 million and many natural resources creates tremendous opportunities for investors.
The VN Index trades at 10.4 times estimated earnings versus its 5-yr average of 11.2 and lower than the six Southeast Asian markets. Earnings per share for the Index companies are expected to rise 9.3 percent in 2012 and 18 percent in 2013.
Dominic Scriven at Dragon Capital is cautiously optimistic about the outlook for stocks as concerns about non-performing loans at banks are countered by easing inflation. The IMF said banks have reported bad debt to be 4.5 percent of outstanding loans versus the central bank’s estimate of 8.75 percent. Scriven says we are some way through this damaging process, but confidence at all levels is very low – banks aren’t lending, companies aren’t investing, consumers aren’t buying, people aren’t investing in real estate. Scriven has reduced holdings in banks and is heaviest weighted in consumer stocks.
The Asian Development Bank said private consumption and investment are bolstering Southeast Asian economies even as the rest of the region is forecast to expand less than initially estimated, expecting Southeast Asia to grow 5.3 percent in 2012.
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