Vietnam Stocks May Decline 30 Percent, Investors Say (Update2)
By Darren Boey
March 21 (Bloomberg) -- Vietnam's stocks are expected to drop 30 percent or more in coming months because earnings no longer support valuations after a rally that's made them the world's best performers, investors at a conference in Hanoi said.
The Ho Chi Minh City Securities Trading Center's VN Index has climbed 49 percent this year, the most among 90 benchmarks tracked by Bloomberg. The market value of the measure's 107 members was $15.8 billion at yesterday's close, up from about $500 million at the end of 2005. Five stocks are valued at more than 100 times earnings, according to Vietcombank Securities Co.
``I'm not aware of any market getting to these levels that has had a minor correction and flattened out and waited for earnings to catch up,'' Dean Van Drasek, an executive director at Hong Kong-based LIM Advisors, which manages more than $700 million, told delegates at the Second Annual Vietnam Investment Forum yesterday. ``I will go out on a limb and say I expect a contraction of at least 30 percent.''
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