Vietnam Stocks Electrified as Deals Spur Market `Re-Rating'
(Bloomberg) -- Vietnamese stocks have taken off in November -- with the benchmark VN Index rising almost 10 percent -- as foreign investors rushed to expand their footprints in the fast-expanding Southeast Asian economy.
Mall operator Vincom Retail JSC has surged 26 percent since its exchange debut on Nov. 6 after strong demand for its share sale resulted in the offer pricing at the top of the range. The market then got another boost when Hong Kong conglomerate Jardine Matheson Holdings Ltd. last week increased its stake in Vietnam Dairy Products JSC, the country’s biggest company that’s known as Vinamilk, to 10 percent and said it was keen to buy more.
“The success of the Vincom Retail share sale recently and also the purchase of a 10 percent stake in Vinamilk by Jardine has kind of electrified sentiment,” said Fiachra Mac Cana, managing director and head of the institutional client division at Ho Chi Minh City Securities JSC, the nation’s second-largest brokerage. The fact that foreigners are “willing to pay a significant premium to current valuations” is leading to a “re-rating” of the market, he said.
The VN Index closed up 1.6 percent on Tuesday in Hanoi, with the measure on course for its best month since January 2014. It’s the best month-to-date performance in local-currency terms after Mongolia among around 100 stock gauges tracked by Bloomberg.
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