This Vietnam stock market report is a summary guide to the major news, performance details, and discussion of other factors influencing the Vietnam stock market in February 2023.
Whilst I have taken a bit of a break from this blog in the second half of 2022, I figured the below monthly format might be a good way in the future for myself to stay up to speed with the latest Vietnam stock market news.
VIETNAM STOCK MARKET NEWS TODAY FEBRUARY 2023
After a very strong January in Vietnamese stocks, fears around the property development sector took hold again, resulting in stocks largely reversing all of their sharp January gains. The backdrop of a weaker US stock market in response to a continued relatively hawkish Federal Reserve also did not help.
In particular, Vietnam property developer Novaland is facing further liquidity issues and needed to negotiate a restructuring of its bond payment plan.
VIETNAM STOCK INDEX LEVEL CLOSE FEBRUARY 2023
It has been an extremely volatile start to 2023. After 10% gains in January, the VN Index collapsed around 8% over the month of February, to close at 1,023 points.
VIETNAM ETF PERFORMANCE COMPARISON FEBRUARY 2023
In USD NAV terms here is the performance of these US listed Vietnam ETFs – The VanEck Vietnam ETF (VNM) fell 11.6% February, whereas The Global X MSCI Vietnam ETF (VNAM) fell 11.8%.
In VND NAV terms, Vietnam listed ETF The Dragon Capital VFMVN Diamond ETF (FUEVFVND:HOSE) fell 10.4% in February. Refer below for an explanation of all the Vietnam ETFs out there.
VIETNAM ETF LIST 2023
Below is a complete up to date list of Vietnam ETFs in 2023.
VIETNAM STOCK MARKET CHART 12 MONTHS TO FEBRUARY 2023
Source: investing.com
VIETNAM LATEST ECONOMIC DATA FEBRUARY 2023
The PMI was released and climbed to 51.2 in February. This provided some relief as it came off the back of numbers indicating a decline the previous three monthly readings.
Retail sales grew a solid 13%, yoy and the outlook looks healthy.
Importantly headline inflation eased to 4.3% in February, after the higher 4.9% read in January.
Signs Vietnam is vulnerable to slowing global growth through were apparent with falls in industrial production and exports reported during the month.
VIETNAM ECONOMIC OUTLOOK 2023
Whilst GDP for Vietnam in 2023 looks very likely to come in lower than 2022’s impressive 8% figure, from a stock market perspective that should be ok.
It is still impressive from a regional and global perspective, and may help tame bond markets, which for various reasons were troublesome for Vietnam stocks last year.
WHAT IS THE STOCK MARKET FORECAST FOR VIETNAM?
PYN Fund management are bullish on Vietnam stocks for 2023. In a letter from late February, they note that Vietnam stocks are lagging peer markets of Indonesia, Thailand, Malaysia and the Philippines by some 30%, when comparing relative returns over the last 12 months.
This seems at odds with the good earnings growth seen in Vietnam through 2022, and solid earnings growth outlook going forward.
WHAT IS THE P/E RATIO OF THE VIETNAM STOCK MARKET?
According to Bloomberg, at the time of writing this February Vietnam stock market update, the P/E Ratio of the VN-Index is 13.7 times.
BEST VIETNAM FUNDS / STOCKBROKER COMMENTS FEBRUARY 2023
A direct quote from Dragon Capital below in terms of the interest rate outlook, could be encouraging in the context of other places in the globe seeing inflation peak out much higher.
““Interest rates may remain at their current levels over the coming months due to pressure on the State Bank of Vietnam to maintain or even raise rates in line with other major central banks, and the prospect of more persistent inflation. The CPI for the first two months of the year increased 4.6% year-on-year and we believe this could be managed on average around 4.2%-5.0% in 2023.”
WHICH WAS THE BEST STOCK TO BUY FROM VIETNAM JUST BEFORE FEBRUARY 2023?
I planned to use this heading to discuss one of the Vietnam major moves for the month in the positive sense. However this report given we had such a sharp fall in the VN-Index for February, it was a struggle to find stocks in that category!
I thought I would mention Airports Corporation of Vietnam (ACV:HSCT), as in this case the stock only fell by less than 1% for February, a lot better than most of the market.
I felt it was worth pointing out as it is a similar theme to what I observed in other stock markets and financial results. That is, things are looking awfully challenging in terms of consumer confidence and discretionary retail in the midst of surging cost of living including interest rate payments for those in debt.
Despite this however, due to the pent-up demand for travel related services, this area does not seem as gloomy for 2023. Airports Corporation of Vietnam (ACV:HSCT ) will obviously be assisted by a travel rebound, of which I will discuss a little further in my observations further down in this post. Even though the sector is also discretionary, the pent-up demand is holding it in good stead in a tough economy for the average consumer.
WHAT HAPPENED WITH THE VIETNAM STOCK MARKET IN FEBRUARY 2023 SECTOR WISE?
Given the news cited earlier in relation to issues surrounding property developer Novaland, we saw negative sentiment spill over to other property developers. For example, Vinhomes (VHM:HOSE) was in particular hit hard, falling 19% for the month.
ON THE GROUND NEWS AND THOUGHT SNIPPETS FROM VIETNAM FROM STEVE
I hinted above about tourism perhaps being a brighter spot because of pent up travel demand. That’s the feeling I have got from my usual HCMC hotel stay recently, hotel prices unfortunately up quite a bit from mid-way through last year!
I also found an interesting story noting demand demand from Indian tourists . This stood out to me also in HCMC, and seems like a good opportunity for Vietnam being helped by more direct air routes between the nations.
I managed to get to Phu Quoc for a break in February and that also had a good vibe. It was an ideal weather time and the second time I have been there, I do recommend.
Phu Quoc February 2023
Lastly Vietnam’s openness to foreign investment has generally been a positive trend, although there has been room for improvements. It seems as though there was a bottleneck of business applications, visas / work permits and the like that frustrated applicants last year. This year I hear things are improving, or at the very least attempts are being made to address such issues.
HCMC removes hindrances to work permit issuance for foreigners – VnExpress International
Thanks for reading again, for the basics on how to invest in the Vietnam stock market check out the below link if you have not done so already.
ARE EMERGING MARKETS A BUY IN 2023?
Since I assume many readers of this blog might have an interest in other equity markets that are either considered frontier / emerging, I will occasionally provide relevant links to Seeking Alpha articles of mine.
I believe that non-members to Seeking Alpha have access to a certain amount of articles per month they can read for free. So hopefully the entire article is available and useful to some. If not, well Seeking Alpha allows me to make short exerts here so I can do that in some instances.
Below is a link with my recent thoughts on the prospects of Korean stocks in 2023. More specifically, the Korea Fund (NYSE:KF).
Summary
This closed-end fund trades at a large discount of circa 15%, has an acceptable expense ratio, and has performed a little better than its benchmark over the last decade.
Korean stocks are amongst the world’s cheapest based on forward P/E ratio. Emerging markets, in general, are also historically relatively cheap and primed to attract global interest now.
Shareholder activism trends can ensure that such potential will not result in a “value trap” investment here.
Another positive catalyst is likely from China’s recent move to ease Covid restrictions. China’s previous restrictions were a factor, making Korean equities one of the worst stock markets in 2022.
Korea fund history and past performance
The Korea Fund (NYSE:KF) history goes back decades; however, it has been a long time since it could be regarded as successful. The since-inception returns figures are boosted from higher returns achieved way back more than a decade ago. Absolute returns have been poor in the last decade, barely in positive territory.
That in itself does not lead me to give the Korea Fund a miss. Markets can often move in decade long trends. For instance, the first decade of the 2000s saw emerging markets do relatively well. The 2020s could see a repeat now that valuations in markets like South Korea have become compelling.
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Thanks for reading again, for the basics on how to invest in the Vietnam stock market check out the below link if you have not done so already.
HOW TO INVEST IN THE VIETNAM STOCK MARKET
Thoughts welcome in the comments area as usual, good luck for the month ahead!
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