The benchmark VN Index has rebounded 15% in April, becoming the world’s best performer, data compiled by Bloomberg show. That follows last month’s 25% slump on concern about the coronavirus impact. The gauge, which has been in a bear market since 2018, is trading at about 11 times estimated earnings for the next year, less than the five-year average of 14 times.
The VN Index fell as much as 31% this year, hitting its lowest level since December 2016 on March 24. While it has rebounded 15% since then, it remains marred in a bear market while Southeast Asian peers Thailand, Indonesia and the Philippines entered bull territory in recent days. The Vietnamese gauge, which was down 0.9% as of Tuesday’s midday break, remains 37% below its record in 2018.
“It seems the market is looking beyond 2020 earnings as there are some very well run businesses especially in consumption-related sectors, which were trading at very attractive valuations,” said Ruchir Desai, a fund manager at Asia Frontier Capital Ltd. “Any major increases from here could suggest it could be getting ahead of itself as the near-term hit to exports, tourism and income levels is still to be felt fully.”