From Extreme Turmoil to Calm, Vietnam Stocks Attempt a Comeback

(Bloomberg) -- Vietnam’s volatile stock market, which has gone from being the best performer in Asia Pacific this year to barely breaking even, seems to be entering a calmer period.

After surging to a near seven-year high in June on a combination of trade war contagion fears and a higher U.S. dollar, 30-day volatility on the benchmark VN Index has fallen to the lowest level since November.

The macroeconomic turbulence of the past few months “is over” with the prospect of an escalating trade war encompassing Vietnam more “remote,” said Michel Tosto, head of institutional sales and brokerage at Viet Capital Securities. Inflation is expected to be contained and the currency has become more stable, he added.

“All this has brought a sense of calm to the market, and investor focus is again on earnings, which look solid for most companies,” he said. “Valuations are much more reasonable now, compared to the mid-March high.”

From Extreme Turmoil to Calm, Vietnam Stocks Attempt a Comeback

While the benchmark index remains about 17 percent below its April peak, it has rebounded over 10 percent from its July low, leaving it with a modest one percent gain year-to-date. The gauge currently trades at 15 times forward earnings, down from over 20 in April, according to data compiled by Bloomberg.

The Vietnamese economy grew 7.1 percent in the six months through June compared with a year earlier and the World Bank revised its forecast on Vietnam’s 2018 economic growth to 6.8 percent from 6.5 percent.

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