The statistics
show that stocks with the Price-To-Book Ratio (P/B Ratio) at less than 1.2
times will grow 60-90 percent after one year and the P/B ratio of the whole
stock market would be about 1.08 times, Le Chi Phuc, investment director of SGI
Fund Management Co said while exchanging the research results with investors at
the conference themed "Decoding the phenomenon of VN Index" held by
MSBS Securities Co last week.
The analysis group took Thai stock market as a measure for its research
whereby the SET of the Stock Exchange of Thailand fell from the threshold of
1,700 points in January 1994 to 200 points in August 1998 (down 88.5 percent).
Thailand's stock market really hit the bottom in August 1998 after the
forex rate re-stabilised and interest rates plummeted to below 10 percent. In
the process of hitting this bottom, there were two technical recoveries of 30
percent and 50 percent after the Thai central bank took the effort to devaluate
the Baht twice at 30 percent and 20 percent, trying unsuccessfully to cut
interest rates in July 1997 and November 1997.
According to SGI, the HNX-Index and VN Index can only be reduced by 10
percent - 30 percent from the ending threshold of 2011 if witnessing the break
and risks for the real estate market and banking system.
The analysis team also estimated that, in the past 10 years, the Asian
stock market has had the P/B evaluation at less than 1.2 times for only two
times. If buying shares when the PB is at less than 1.2 times, after one year,
the profit will be 60 percent -90 percent.
According to Bloomberg, PB of the whole Vietnam stock market in late
2011 was 1.08 times.
VietBiz24
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