Vietnam’s market falls in face of good economic figures, ratings upgrade
HO CHI MINH CITY - Vietnam’s Industrial Production Index increased by 9.7% on-year in May compared with 6.6% in May 2017. Manufacturing and processing sector posted high growth of 11.8% YoY, with the Vietnam's Purchasing Managers Index (PMI) reading reached 53.9 in May from 52.7 in April to mark the 30th consecutive month of expansion.
New orders with rising export demand saw the fastest jump in 14 months. Meanwhile, retail sales of goods and services showed an 8.3% on-year rise in real terms to US$76.3 billion for the period, partly driven by booming tourism with foreign visitors up 27.6% on-year.
However, in its monthly review, Vietnam Asset Management (VAM) says the positive macro-economic data in May could not help the stock market as it continued sharp corrections under profit taking, negative (local) investor sentiment affected by foreign outflows, and tighter margin lending to local investors.
“With Fitch’s upgrade (on May 14) of Vietnam’s credit rating, the country is now closer to the investment grade which should help attract more interest from foreign investors for both direct and indirect investments,” VAM says.
“Fundamentally, the outlook for Vietnam’s economy remains intact and strong growth is broadly forecast for 2018.
“This should support the stock market in a long run, but investor confidence may take some time to be regained.
“Currently, market valuations has reached a more reasonable level in comparison with regional peers, with various good stocks now traded at attractive prices. This presents opportunities for long-term investors.” www.vamam.com (ATI).