VIETNAMESE STOCK MARKET

— 20.04.2020

The Vietnamese stock exchange has been on a slide since April 2018 by 35.2 percent. Decline is now 18.8% since the beginning of this year. After the weak two-years performance, about one fifth of the stock market’s value has been lost during the past few of months. During 2020, foreigners have unloaded a record number of Vietnamese shares, total net selling by foreign investors in 2020 is cumulatively 564 million USD. From the beginning of 2020 until 20th February foreigners were in fact still net buyers of Vietnam for 84 million USD, but since then net selling has occurred in very short period of time for a total of 648 million USD. Foreigners have never unloaded Vietnamese shares so much in a year. We believe that this year’s total net selling amount will shrink back during rest of the year. It is not totally out of the question that early year appetite will return and switch back the buy/sell balance by foreigners into net buying for 2020.

Stock exchange turnover has remained brisk, with a daily turnover of USD 199 million since the beginning of the year. During April, the average daily turnover has risen to USD 207 million. The average daily turnover in 2019 was around USD 200 million. According to Bloomberg’s consensus estimates for 2021 P/E ratio for the Vietnamese index is 9.7. P/E for the Vietnam All-Shares Index for 2021 is 8.0.  61,000 new customer accounts were opened for stockbrokers during the first quarter – an increase of 18% y-o-y.

The sell off in shares has triggered many companies to do buybacks. Nine out of 21 PYN Elite core companies have applied for permission to launch buybacks between April and May and/or the company’s management/ largest shareholder have registered their intention and the amount to purchase shares. In Vietnam, the company’s management must apply for prior permission for its purchases and all purchases are made public.

VN Index 12-month forward P/E

Source: Bloomberg