Gold opportunity for spirited investors

The May 31 report of Bao Viet Securities Co (BVSC) showed that the price to earning (P/E) ratio of Vietnamese stock market is fairly competitive as compared with regional countries'. The report was presented before over 40 investors from investment funds of Singapore, Malaysia, Hong Kong, Japan, US, Switzerland and EU at the ATIC@HCM City 2008 Finance Investment Exhibition. Dau Tu Chung Khoan had an interview with Vo Huu Tuan, deputy general director of BSVC about the issue. Excerpts:

What is your comment as comparing P/E ratio of Vietnamese stock market with other regional countries?

Average P/E ratio of Viet Nam's basic sectors all is lower than those of Thailand, China and newly emerging Asian nations. Here, it is remarkable that Viet Nam's is lower than Thailand's, a market with a high system risk due to the political stability according to international investor council. Additionally, Viet Nam's price to book value (P/B) ratio is close to Thailand's. Regarding the development potential of sectors, Viet Nam only ranks after China but its profitability coefficient stands a higher grade than Thailand. Based on the comparison of above basic indexes, I think that current share prices of Vietnamese market are very competitive.

Which sectors should investors focus on at the moment?

In our (BVSC) point of view, those are sector shares of pharmaceutical, banking, basic materials, food, soft drink and public utilities. These sectors suffer less affects from inflation while their growth potential remains high. Particularly, the banking sector now has a P/B ratio close to the book value so the investment risk is at low with the quickest rally ability.

Many investors did not dare to purchase in for the fear of another fall in share prices. Whether should inventors continue buying or waiting?

Our recent report aims to help investors consider investment opportunities. Investment time will be decided by investors themselves. The analysis showed that current share prices are very good for investors. In my opinion, investors now have an excessive pessimism on the stock market, which could push the market to continue plunging. Thus, it is right time for investors to purchase shares.

At present, foreign investors keep buying whereas domestic ones race to offload shares. However, due to the limit in foreign holding in local firms, so their moves do not cause any strong affect to the market.

Can you please assess securities companies' setting up of price stabilising fund in charge of buying back mortgaged shares?

The setting up of these funds demonstrates brokers' role in stabilising share prices and making good psychology for the stock market. I think this is the good idea in need of the support of securities companies and investment funds as well. (DTCK)