Tuesday, April 17, 2007

Vietnamese stocks: Asia's priciest

Cool article from last week's Bloomberg.com selection on share valuations in Vietnam.

Vietnam is now home to Asia's most expensive share market, with the Ho Chi Minh City's VN Index fetching 32.6 times this year's estimated earnings (China's CSI 300 index is valued at 32.4 times est. earnings).

The Vietnamese stock market was propelled to dizzy heights last year, as a flood of investment money pumped the share market capitalization up 40 times in the space of one year. From a market valuation of $500 million at the end of 2005, shares rose to a peak value of around $20 billion in late 2006.

Valuations have backed off a bit in the latest decline, but the Vietnamese government will continue expanding the pool of tradeable companies. Excerpt:

The value of the Ho Chi Minh trading center's shares through today has risen to $14.8 billion from about $500 million at the end of 2005. The number of listed companies on the six- year-old market has more than doubled over the past six months to 107. Almost all were initially wholly state-owned. Pha Lai Thermal Power, the VN Index's fourth-biggest company, is still majority-owned by the government.

The State Capital Investment Corp., responsible for overseeing the sale of government holdings, has so far taken control of 450 companies and listed 17, including Vietnam Dairy Products Joint-Stock Co., according to Le Thi Bang Tam, chairwoman of the SCIC.

The number of companies under the SCIC's management will grow to 1,000, with plans to list at least 20 in the stock market, said Tam, a former deputy finance minister. The goal is to eventually keep control of just 100-200 ``strategic'' companies, she said.

See the article link for more.