The Vietnamese stock market offered good opportunities in this quarter since valuations were low and the economy was looking up, Don Lam, CEO of asset management company VinaCapital, said.
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Speaking at an investors' conference held by VinaCapital in HCM City yesterday, he said that at a PE — price by earning per share — of around 10, equity valuations are attractive compared to regional markets.
Andy Ho, the company's head of investment, said: "Banks demand interest rates of around 13 per cent, yet businesses continue to borrow, showing they have managed to achieve higher growth."
Continuing FDI flows into Viet Nam had also prompted strong interest among foreign investors, he said.
In the medium and long terms, the economy would grow strongly with GDP rising at 7 per cent to 8 per cent annually until 2015, while the steady migration to urban areas continued to create demand on infrastructure, both positive factors in the view of investors, he explained.
VinaCapital Group, a leading asset management, investment banking and real-estate development company focused on Viet Nam, organises the annual conference to invite foreign investors to learn more about investment opportunities in the country.
This year, following a day of presentations and panel discussions, there was a half-day of private one-on-one meetings with investors and site visits to VinaCapital-invested property projects.
Don Lam said: "This year, [there were] over 90 investors, double the number last year. This is an important indicator of the renewed interest in the Vietnamese market among overseas investors. We are confident this interest will result in tangible investments in the coming year and beyond."
So far this year, Viet Nam's GDP growth has been around 6.5 per cent and corporate earnings growth, 10-15 percent, Lam said.
However, the stock markets have performed poorly, given concerns over the trade balance and the depreciation of the currency, among other issues. The VN Index has fallen 28 per cent in the past 12 months. However, foreign investors have been net buyers this year.
"Overseas investments come from institutional investors, and they are always looking for good long-term buys. The low valuations of Viet Nam's blue chip companies in 2010 makes this an excellent time for equities investment," Ho noted.
VinaCapital is preparing to raise two new funds, one for investment in equities and the other in real estate, in the next 12-18 months. They are expected to raise between US$400-600 million.
VinaCapital's three funds listed on the AIM (Alternative Investment Market) in London — focusing on listed and private equities, real estate, and infrastructure – had total assets of $1.8 billion under management as of September.
