Rong Viet Securities said that the P / E of the VN-Index at the end of September was 15.1 times, higher than before the outbreak, so it was difficult to attract foreign capital.
At this level, the P / E - price-to-equity ratio - of the VN-Index has surpassed Indonesia's JCI Index and Hong Kong's Hang Seng Index, but is still lower than the indexes representing Japan and Singapore. , Korea, Thailand ...
This valuation, according to the analysis group of Rong Viet Securities Company (VDSC), is not too attractive to attract cash flow when it was higher than before the pandemic broke out in Vietnam. This is reflected in the fact that foreign investors are maintaining their selling streak for 10 consecutive sessions with a total net selling value of over 2,600 billion VND.
JCI Index (Indonesia) ● P / E: 9.77
P / E of the market when the epidemic broke out fluctuated 14.5-15 times, even after the record drop last March it fell below 13 times and bottomed out within four years. This valuation was once considered an advantage for Vietnam to attract foreign capital flows again, and at the same time create a resilience for indicators when the epidemic showed signs of being controlled globally.
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P / E was pulled up with the rise of VN-Index in the past eight months, especially in August and September, thanks to the rapid recovery of macroeconomic indicators. However, analysts worry that the index will correct again because of the announcement of business results of listed companies in the second half of this month.
The 'believe out sell' effect will put pressure on the VN-Index as some VN30 stocks, especially the banking group, have risen sharply in August and September due to rumors of possible business results. private placement to strategic shareholders ", VDSC expert said.
This effect in addition to foreign investors' continuous net selling could cause the market to go sideways. The unpredictable movements of the world stock market due to the presidential election process, the new US economic stimulus package and the Covid-19 situation did not bring optimistic signals to the VN-Index. Therefore, the analyst team thinks that the index might fluctuate in the range of 865-920 points.
A prudent investment strategy is considered by VDSC experts to be appropriate in this period when the prices of many stocks soon reflect the business results of the third quarter. Investors are recommended to take profit in the gaining sessions and patiently wait for the correction to disburse in stocks with more positive changes in year-end business activities.