SSI said in the baseline scenario, the P/E would reach around 18, corresponding to its forecast that the VN-Index will gain 12.3 percent in 2021.īanking and real estate are the two largest industries in the VN-Index, accounting for 27 percent and 26 percent of its total market cap.īoth are set to benefit from post-pandemic interest rate cuts, improving banks net interest margins, while housing prices increase amid limited supply in Ho Chi Minh City, Vietnam’s largest market.
The P/E as of December 28 this year was 16.03, and though this was higher than pre-Covid-19 levels, it was lower than in neighboring markets. "We acknowledge that 2020-21 may be different, especially given the ample liquidity and the growing role of individual investors, especially F0 investors," the analyst team said. SSI forecast this level to be surpassed in the best-case scenario.
The VN-Index’s median P/E in 2018-20 was 16.4 while the highest ever recorded was 21.6 on March 22, 2018. Liquidity in the form of investment by retail investors, especially those entering the market for the first time, is expected to push valuations up. Profits of listed companies are forecast to rise by 23 percent after falling 17 percent in 2020.
The P/E index reflects how much investors are willing to pay today for future growth expectations. The average price-earnings ratio (P/E) for the VN-Index could rise even further than the highest levels achieved in the last three years, top brokerage SSI Securities Corporation said in its latest outlook.
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