VN-Index to hit 2,500 points by 2025-2026: Pyn Elite Fund

Vietnam’s benchmark VN-Index could reach 2,500 points by 2025-2026 based on a price to earning (P/E) ratio of 16 according to the profit growth forecasts of listed companies, said Pyn Elite Fund, a Finnish investment fund.

In a recent letter to investors, the fund said that the strong growth momentum of the stock market had weakened recently due to increasing global economic and financial market instabilities.

That was why instead of making forecasts on the market like in previous months, Pyn Elite Fund is offering some basic factors to explain why the fund feels completely confident with its investments in Vietnam and why the Vietnamese stock market remains attractive.

Vietnam is one of the fastest growing economies in Asia, with GDP expanding 8% last year. The fund believed that the country's GDP growth will reach more than 5% in 2023 as economic activities accelerate at the end of the year.

Pyn Elite Fund expected Vietnam's annual economic growth rate to continue to maintain at 5-7% in the near future, while the annual profit increase of listed companies will remain at 12-25%.

Pyn Elite Fund pointed out many factors that underpin confidence in Vietnam’s economic growth, including a fast-growing middle class, rapid urbanization, improved education levels, efficient industrial production, a proactive and independent trade policy, and policies towards long-term economic stability and healthy finance.

Vietnam’s economy is developing from simple to more complex products and services, especially with interest in investing in new fields such as the software industry. With more than 500,000 information technology engineers, Vietnam is currently in the top five countries in the world in this field. It is expected to have an additional 50,000 IT engineers graduating each year, Pyn Elite Fund wrote.

The foreign fund also appreciated the fact that Vietnam and the U.S. have become comprehensive strategic partners after President Joe Biden’s visit to Hanoi. At the same time, its inflation remained under control, increasing only 2.9% in August.

Therefore, Pyn Elite Fund evaluated that the Vietnamese stock market remained very attractive as the VN-Index currently trades at a P/E of 12.3 based on listed firms’ 2023 earnings expectations. With the profit growth predicted for 2024, that ratio will fall below 10.

In August, Pyn Elite Fund's performance recorded minus 1.74% after three consecutive months of positive growth. However, in the first eight months of the year, it still expanded 12.41%.

As of August 31, 2023, Pyn Elite Fund’s portfolio size was nearly 777 million Euros, or $820.6 million. The top 10 largest investments in the portfolio account for more than 86% of the fund’s total, including five banking stocks: STB of Sacombank, CTG of VietinBank, TPB of TPBank, MBB of MBBank and HDB of HDBank, and VNFinLead ETF certificates.

Stocks with the most outstanding performances last month were from the banking group. Among them, STB, CTG and TPB showed the most impressive developments, gaining 12.8%, 8.2%, and 4.5%, respectively.

The Vietnamse stock market experienced strong corrections during the September 18-22 week with four sharp falling sessions and only one gaining on September 20.

Closing the Friday session, the VN-Index fell 19.7 points, or 1.62%, to 1,193.05, the lowest since August 25, due to massive selloffs.