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Vietnam's stock valuation among lowest in Southeast Asia
Hai Yen 11:08, 2018/08/10
The reason behind a stable P/E of the VN-Index compared to one year earlier is the positive business performance of listed enterprises.
With the price-to-earnings ratio (P/E) of over 17, the benchmark VN-Index is valued among the lowest in Southeast Asia markets, behind just Singapore's STI with P/E of 11.74, reported CafeF. 
 
Asian markets' P/E. Source: CafeF.
Asian markets' P/E. Source: CafeF.
Other benchmark indexes including PSE of the Philippines and JCI of Indonesia are trading at P/E of over 20. 

The first quarter of 2018 marked the first time that VN-Index had peaked at an all-time high of 1,200 points. At that time, VN-Index's P/E climbed to nearly 22 and was one of the world's fast growing stock markets since the beginning of the year. 

However, external factors such as the escalation of the trade war betweent the world's two largest economies, and volatility of the exchange rate, caused negative impacts on the global financial market, including Vietnam. 

By the end of the second quarter, the Index retreated to around 900 points, and later reached 960 points in early August. 

The recent correction phase has made Vietnam's stock market more attractive compared to the beginning of the year. According to Bloomberg, VN-Index's P/E is currently around 17, which is nearly unchanged against the same period of last year, despite a 20% increase of the index.

The reason behind a stable P/E of the VN-Index compared to one year earlier is positive business performance of listed enterprises. 

Total net profit of listed enterprises in the Ho Chi Minh City Stock Exchange (HoSE) in the second quarter reached VND34.4 trillion (US$1.47 billion), up 42% year-on-year. 

Moreover, profit of enterprises in the HOSE-listed 30 largest companies stood at VND28.4 trillion (US$1.21 billion), accounting for 83% of total profit of companies on the bourse with growth rate of over 22% year-on-year. 

Enterprises with significant contribution to the high profit growth rate of the market in the April - June period included PetroVietnam Gas Corporation (profit of VND3.12 trillion or US$133.35 million, up 73% year-on-year), Vietcombank (VND2.92 trillion or US$124.8 million, up 45%), Masan Group (VND2.21 trillion or US$94.47 million, up 916%), Hoa Phat Group ( VND2.19 trillion or US$93.62 million, up 43%), BIDV (VND1.96 trillion or US$83.79 million, up 123%), among others. 

Vietnam remains one of the most attractive destination for foreign investors in 2018 who have net purchased VND32 trillion (US$1.4 billion) year to date, while that of most markets in Southeast Asia saw capital outflows, according to CafeF. 
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