The Vietnamese market was attractively priced even before the stock market slump caused by the coronavirus. Vietnamese listed companies have seen good earnings growth, but the index has been consolidating and getting ready for a further take off for a couple of years now. At the same time, stock markets with weaker earnings growth, for example The US and Finland have enjoyed outperformance. Vietnam’s ALL SHARES P/E for 2020 is 10.5 and next year is 9.0. These are very inexpensive ratios given the growth of the Vietnamese economy and the outlook for the earnings growth.
PYN Elite performed well the first three weeks of this year, rising 3.4% and this was expectable. The founding for a good performance in 2020 was on the cards, but the virus took the stock market down. Strong measures have been taken to combat the spreading of the virus, even though this has also paralyzed economic growth. However, this is not a structural problem, but instead a temporary government operation that has caused weakening of the stock markets sentiment. Such reasons have always been a good opportunity to buy the market and this holds true at the present moment too. China’s determined action has led to the latest information showing that no new infections have occurred in 21 out of 34 Chinese provinces in the last two days, although at the same time news of new cases and spreading of the virus in Korea and Italy are worrying investors.
The Vietnamese economy will slow down during Q1, though eg. exports continued to grow by 5.3% during the first 1.5 months of the year. Now it´s time to take advantage of the situation. The core companies in PYN Elite’s portfolio have P/Es of 8.5 for 2020 and 7.0 for the next year.