Vietnam is one of the world's "cheapest" stock markets and Templeton Asset Management Ltd. is "finding lots of bargains," Chairman Mark Mobius said. The benchmark index rose the most in three months.
"Prices in Vietnam are very, very low," Singapore-based Mobius, who oversees about US$34 billion in emerging markets, said at a briefing hosted by the Institute for Global Economics in Seoul Monday. "If you buy and hold, and if stocks are good, I think you should do very well."
Mobius told the briefing he recently visited Vietnam Dairy Products Joint-Stock Co., a "fantastic, very well-run" company, and said after his speech that he wasn't making a recommendation. Vinamilk, as the company is known, trades at 12.1 times estimated earnings, compared with a 12.3 multiple for the benchmark VN Index.
The measure of 224 companies on the Ho Chi Minh City Stock Exchange has climbed 7 percent this year, extending last year's 57 percent advance. The gauge today jumped 1.9 percent to 529.31, the most since Jan. 26, and the best performer among 92 global indexes tracked by Bloomberg, after Vietnam News reported that inflation in Vietnam's capital city Hanoi slowed in April from March on lower prices of food and restaurant services.
The data indicates that "inflation is not that severe," said Nguyen Hoai Nam, an analyst at Kim Eng Vietnam Securities. "Therefore, monetary policy won't be as tight as the previous period. This boosted investors' sentiment."
Saigon Securities Joint-Stock Co., the most active stock by volume and the second-biggest brokerage, rose by the daily limit of 5 percent to VND44,200, the most since Dec. 21. The Ho Chi Minh City-based company said net income increased ninefold to VND271 billion in the first quarter on gains in stock investments, according to a statement on the exchange's website.
Overseas investors bought a net VND179 billion ($9.4 million) of stocks on the exchange Thursday, the most since April 2, boosting purchases this year to VND3.6 trillion, according to the bourse's website. Net foreign purchases by companies and funds fell to VND2.7 trillion last year, from VND5.8 trillion in 2008 and VND23 trillion in 2007.
Vietnam's price-earnings multiple is the fourth-lowest in Asia, ahead of South Korea, Thailand and Pakistan. The VN Index is less than half the record high of 1,170.67 on March 12, 2007, and it has slid 15 percent from last year's high of 624.1 on Oct. 22. "Vietnam's stock market is undervalued, compared with peer countries around the region," Choi Chang Hoon, chief investment officer and acting chief executive officer at Hanoi-based Thang Long Meritz Fund Management Joint Stock Co., said in a phone interview Thursday.