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Ashmore Group doubles exposure in Vietnamese stocks

Released at: 13:56, 26/11/2018

Ashmore Group doubles exposure in Vietnamese stocks

Photo: Viet Tuan

Global equity selloff helping make Vietnam more attractive, according to report on Bloomberg.

by Phi Linh

The global equity selloff has helped make Vietnam a lot more attractive to the London-based Ashmore Group Plc, according to a report on Bloomberg.

The Ashmore Group has doubled its exposure to Vietnamese stocks since the end of the first quarter, according to Fund Manager Mr. Andrew Brudenell. The firm, which managed $76.4 billion as of end-September, now sees the country’s banking sector and some consumer stocks as notably cheaper.

“We remained very lightly exposed to Vietnam through most of the last 12 months, up until maybe the last few months where we’ve seen the market derate,” Mr. Brudenell said in a phone interview with Bloomberg. “We are now more positive than we were last year but more within specific sectors.” He added that at the end of last year, valuations in Vietnam were “too high”.

The VN-Index has fallen 23 per cent since its April 9 record high, battered by concerns over the trade war between the US and China. The MSCI Asia Pacific Index has declined 13 per cent over the same period, while the S&P 500 Index has gained more than 1 per cent. Vietnam’s benchmark index is trading at 13.5 times 12-month expected earnings, down from over 20 in April.

Vietnam’s real estate stocks still look “very expensive” and their possible collapse poses a risk for the market, Mr. Brudenell said. Another reason for caution is possibly faster inflation, including that tied to movements in the Vietnam dong against the Chinese yuan.

Still, Ashmore is “positive” about Vietnamese stocks overall. The country’s GDP growth is strong, its currency is not under too much stress, and corporate earnings growth “should be pretty decent,” Mr. Brudenell said.

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