I often wish they'd specify the year to make it explicitly clear. My understanding is 2024 is about 13 and 2025 something slightly over 10. (And 2026 would be around 9 or possibly a touch under on current growth forecasts.) Some articles published say 8-10 months ago might say 14 (for 2023) but that would be when the market was slightly lower, so we might say that was 15 now. If they said which Calendar year it is, it would be so much clearer when searching back. |
Thanks for pe graph Aleman. If the ratio falls to about 10 I might start to believe the numbers.
But at 15 it's similar to where we were in the last few years despite a flat market and supposedly big growth in Company Profits. |
amt - our own directors said the market's forward P/E was 10.3 in the last update. I think the 13-14 levels seen in some articles might be trailing P/Es of older articles (and possibly before the stronger earnings recoveries seen in later 2024 and upgraded forecasts for 2025 which have brought the forward P/E down a bit).
This article shows a graphed historic P/E averaging around 15-16 for 2014 to 2023 for the top 30 stocks which make up the bulk of the market.
So a historic P/E of 10.3 a year from now suggests a reversion to the mean could bring 50% upside to stockmarket rating at over a period of time. |
 US exports are high - about 27% of Vietnam's $420bn - but other destinations are growing rapidly while US is not. I think this rapid growth to elsewhere makes US tariff threats less of an issue. Strong demand in the rest of Asia would make it easier to switch destinations and Vietnam is cheap enough that a 10% general tariff would probably make little difference. A bigger tariff might reduce demand but that would cause inflation problems for the US and/or disruption finding alternatives. Screwing the US economy would defeat Trumps objectives, surely? Under threat at the moment seem to be Steel and Aluminium which amount to about 1.5%, or 3% for broader metal products. I think Vietnam is about 3.5% of total US imports. US exports to Vietnam are very low - about 0.2% - so there is a large deficit to attack. There are political considerations, though. US (business) is on good terms with Vietnam's communist government and would not want to alienate a country with coast along the militarily sensitive South China Sea. We're talking about Trump, though, so who knows? |
Are there any available statistics on Vietnamese balance of trade with other countries?
Specifically what % of trade is with the US compared to others ? |
Thanks for info
Reports from VNDirect Securities Corporation showed that the combined net profits of these companies increased by 27.8 per cent year-on-year and by 13.4 per cent from the previous quarter.
However why is it that with the stock market flat for the last 4 years the overall pe ratio has not fallen significantly or not much.
I read about these huge increases in net profits every year and yet the average pe seems to about 13.
So should be about 9 next year but doesn't seem to happen in practice. Makes me very suspicious of the statistics being thrown around. |
We have no idea about lots of things.
Profits of listed companies in Việt Nam experienced robust growth in the fourth quarter (Q4) of 2024, marking the fifth consecutive quarter of growth. As of February 7, 1,072 listed companies on the stock exchanges have disclosed their Q4 2024 business results. Reports from VNDirect Securities Corporation showed that the combined net profits of these companies increased by 27.8 per cent year-on-year and by 13.4 per cent from the previous quarter. |
We have no idea where the tariffs war will end up so to make an estimate on growth in Vietnam is pure guesswork at the moment.
We don't know either how growth translates into Company profits and forecast pe ratios |
VNI is now only 1% off a 3-year high. It's been creeping up slowly on low volume this week, which means not much selling pressure around this level this time. That is usually more supportive of a breakout. |
VOF has a property and financials bias. Hopefully Eximbank's 54% rise in Q4 profit to around $130m bodes well for other financials that VOF might hold. Also, it's plans to further expand into the north of Vietnam bode well.
Despite expected US tariffs, the Vietnamese government still targets growth at 8%+ in 2025 and 10%+ in 2026. |
VNI up slightly again today. It's not up much but it appears to have broken and backtested a minor downtrend going back to last summer, setting it up to have a go at major horizontal resistance stretching back 3 years that is less than 2% above its current level.
Midcaps/HNX have broken a similar but less minor downtrend going back to early summer. Resistance there is less horizontal and more of another longer 3-year downtrend, with the next target then about 6% higher.
Ditto unlisteds with next target 3% higher.
These are short-term positive charting developments and possibly consistent with smaller companies looking a bit livelier, compared to large caps, which is what tends to happen in bull markets, but there are still clear longer term resistances to get through before any fireworks.
I don't know if locals that drive these markets are into charting/TA but I do know there's been lots of local media articles citing a very positive economic outlook, strong profit growth and low share ratings just lately. |
Freedom Superficially everything looks great for Vietnam but the market has been going nowhere for ages, well before Trump. Infact for 4 years while most other markets have been booming.
What is really odd is that company profits have been forecast to grow 20% per annum. The market goes nowhere but the overall pe doesn't fall.
It's a mystery but I suspect corruption may be the issue.
So it's not a no brainer by any means, just to give balance.
I have an investment but reduced it a lot from a year ago.
Foreigners seem to be net sellers nearly everyday. |
Been looking to buy here, but unsure on Trump's stance on Vietnam. Anyone got a view?Seems such a country with an awful lot going for it. |
VOF's yield is around 2.7%.
I've read that tariffs could actually acclerate transfer of US imports from other countries to Vietnam, though it very much depends how they interact with each other. If you push prices up a little, not much changes. If you push prices up a bit more, interest rates rise, economies slow, and struggling companies look harder for cost savings and cheaper sourcing that might need more admininstration rather than just taking an easy option of pressuring an existing supplier. Tougher times make the cost saving effort and disruption of shopping around more worthwhile. Vietnam could benefit - a bit like Aldi and Lidl do well when UK shoppers find money is tighter after tax rises.
With Vietnamese total exports up almost 15% last year, and expected to be up over 10% this year, growth is rapid enough that curtailing US exports a little with tariffs is not probably going to make a great deal of difference to Vietnam's overall growth trajectory in an accelerating Asian economy, expecially when you consider that exports shipped to the US will probably either find an indirect route to get there at a slightly higher price, or just be redirected to other markets. Media tend to react simplisticly to tariff threats as if they will stop the relevant exports. In practice, this rarely happens as alternative paths or markets are found. Media are already speculating that the UK will get electric cars currently destined for the USA on the back of Chinese tariffs - so do US tariffs on Chinese electric vehicles stop them being exported? No. Will US consumers have to pay more for electric cars? Yes. Will US rates rise? Maybe. Who is the winner and loser here? It's not as clear as initial media reports are making out. |
Another interesting point is that VNH were buying back shares at a discount, but when they turned the share price into a premium they were issuing new shares. |
This fund is on a discount as it is not an income fund and doesn't pay you to wait, whilst Trump could easily put the knockers on the cheap labour, employment conditions and manufacturing this region provides, that the USA cannot possibly match. |
There was a large proxy vote for that in Dec 2023 - no direct vote offered so it went through as a significant discontinuation vote - but the board still disagreed after, and then VNH went and did it and it worked for them.
I say worked but it still resulted in asset sales that shrank the fund and possibly pushed down the prices of its (and maybe some of VOF's) underlying holdings. It seems as much a part of the foreign selling of Vietnamese shares as our buy-backs that don't seem to be working to shrink the discount.
IGC greatly shrank a very large discount in 2020 with a tender but the discount has returned modestly at points and further tenders and buy-backs have shrunk the asset base of the fund, obscured by strong market returns. Had it not sold shares and shrunk its asset base, would the fund be larger and the discount have shrunk naturally in the Indian bull market? We can only guess.
The whole thing seems to split opinions. I look at all the ITs selling assets to buy their own shares back and wonder how they they think selling off their asset base can be good for the industry. Individually, in moderation, it makes some sense. Collectively, in large quantities, it's suicidal.
Companies meddling with their own share prices was illegal until the 80s and there is a move to have buy-backs made illegal again in the US. |
Perhaps VOF (and VEIL) need a redemption facility similar to what VNH introduced to eliminate their discount?
"The introduction of a redemption opportunity at NAV less associated costs (the first of which is on 30 September this year) appears to have been behind a significant narrowing of VNH’s discount so that a 25.7% NAV return translated into a 48.2% share price return over the 12 month period ended 31 May 2024." |
Most recent reporting has been dropping the March or September suggestion for Emerging Market Status in favour of just September. That's not so far away and the rest still looks good. Given a 10-year average trailing P/E of over 15, the Vietnamese market would need to rise 50% over the next year to get back to an average rating.
(VOF exposure would probably see NAV rise slightly more than the overall market. Now imagine if NAV went up 60% and the discount closed from 25%+ to 5-10%. There's potential for VOF shares to double in short time when optimism returns. But what and when is the catalyst?)
We think key catalysts supporting Vietnam’s stock market include:
Projected GDP growth of 7.4% in 2025, reinforcing Vietnam’s robust economic trajectory.
Earnings growth expectations for Vietnam’s Top 100 stocks at 18.2% for 2025, which puts the VN-Index’s forward P/E at 10.2x, remaining attractive compared to Thailand (14.5x) and Malaysia (13.6x).
A potential upgrade to a FTSE Emerging Market status in September 2025, which could attract significant foreign capital inflows.
Opportunities from the State’s divestment of assets to finance ambitious public spending plans, supporting economic expansion and infrastructure development. |
@Aleman
Agreed, everything looks very promising, so why is this trust on such a discount?
It does seem odd... |
Despite continued foreign selling on Vietnamese stock exchanges (VOF buy-backs?) , VNI is once again eyeing recent highs that could see it break out. Meanwhile, FDI got off to a flying start in January.
More than 4.33 billion USD in foreign investment was registered in Vietnam in January, an increase of 48.6% compared to the same period last year.
Strong wages, strong retail sales, strong FDI, ,strong exports, booming tourism and strong corporate profits must push stock indices up into new territory soon , surely ....?
The number of international arrivals to Vietnam in January reached nearly 2.1 million, a month-on-month surge of 18.5% and a year-on-year increase of 36.9%, the General Statistics Office announced on February 6. |
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