The global economy is taking a hit, where investors can look nearly everywhere to find value at a cheap price, from the U.S., Europe or even in emerging markets, where investors could find tremendous growth in individual businesses. One of those markets is Vietnam, mentioned in CNBC’s interview with David Roes, CEO at Asean Investment Management.
Within ASEAN equities market, one of the big markets is Indonesia. It might takes six months to have 15% positive performance, whereas one of the emerging and fast-growing markets like Vietnam, if we take 20 positions which gave value, growth and coupon dividends combined, can be more than 60% in six months (four times higher).
Of course, the Vietnamese currency Vietnam Dong is subject to depreciation over the long run. And the equities market is mainly based on macroeconomic factors. The fund is looking for the inflation rate in Vietnam to be below 10% in the first half of 2012. That rate of inflation alone might double the Index.
In the fund’s model portfolio, investors can find a tremendous amount of positions which have all the value factors combined. The stock market in general is valued at a P/E of 3, with growth of 20% and a coupon yield of 12%. However, the risks that investors might have to take now is liquidity. And that is how you can get the value at the much discounted price. Vietnam market has generally sold off 90% from the peak in 2007 in hard currency terms. Because of this, David would get to build up the positions slowly.
On the exit, when everyone’s crazy about the Vietnam market and “trust me they will be,” David confirmed, then the liquidity would not be the problem anymore, it will be an easy sell. On the fundamental side, comparing Indonesia and Vietnam, the return of equity of Vietnamese companies is quite high, around 30%-40%. However, the equity and the book value of listed companies in Vietnam haven’t been matched up yet.
The link to the CNBC interviewed can be seen below:
Investors should look to Vietnam
Within ASEAN equities market, one of the big markets is Indonesia. It might takes six months to have 15% positive performance, whereas one of the emerging and fast-growing markets like Vietnam, if we take 20 positions which gave value, growth and coupon dividends combined, can be more than 60% in six months (four times higher).
Of course, the Vietnamese currency Vietnam Dong is subject to depreciation over the long run. And the equities market is mainly based on macroeconomic factors. The fund is looking for the inflation rate in Vietnam to be below 10% in the first half of 2012. That rate of inflation alone might double the Index.
In the fund’s model portfolio, investors can find a tremendous amount of positions which have all the value factors combined. The stock market in general is valued at a P/E of 3, with growth of 20% and a coupon yield of 12%. However, the risks that investors might have to take now is liquidity. And that is how you can get the value at the much discounted price. Vietnam market has generally sold off 90% from the peak in 2007 in hard currency terms. Because of this, David would get to build up the positions slowly.
On the exit, when everyone’s crazy about the Vietnam market and “trust me they will be,” David confirmed, then the liquidity would not be the problem anymore, it will be an easy sell. On the fundamental side, comparing Indonesia and Vietnam, the return of equity of Vietnamese companies is quite high, around 30%-40%. However, the equity and the book value of listed companies in Vietnam haven’t been matched up yet.
The link to the CNBC interviewed can be seen below:
Investors should look to Vietnam
