The Saigon Times:  In a new Maybank Kim Eng report, you said Vietnam is the only major economy in the ASEAN that escaped the recession and that it can look forward to a faster-than-expected V-shaped recovery. Will you elaborate a little more?

- Hoang Huy: The resilience of domestic retail consumption and surprising export growth have made the differentiation. The former is thanks to the aggressive virus control by the Government and the golden demography, while the latter is the result of the consistent policies of the Vietnam Government of attracting FDI since joining the WTO.

These factors are sustainable and will continue to help Vietnam's economy in the long term.

What would be the impact of such a performance on the Vietnam Stock Exchange Market?

- Posting a small loss of 0.9% as of November 9, the VN-Index has outperformed all its regional peers so far this year, which reflects the quick containment of the virus by the Government during the first and second outbreaks. It is the strong recovery of the economy and corporate earnings.

Do you have any specific stocks that you advise your customers to buy now?

- We focus on a longer horizon, one-three years. Given the current economic recovery and the progress of the Covid-19 vaccine, cyclical sectors such as consumer discretionary, materials and banks are among our favorites. These sectors posted a considerable recovery in earnings in Q3 and are also the outperformers in Vietnam's market so far.

What stocks are expected to perform well until the end of 2020?

- This is too short for a rational investment point. However, given the latest news on the progress of the vaccine from Pfizer and BioTech, the stocks of airlines may be in the spotlight. 

Vietnam’s benchmark VN-Index ended October at 925.7 points, equivalent to a cumulative P/E of 14.5x, up 42% from its March low of 650 points. What would it be, in general, by the end of this year since some experts termed it as undervalued?

- It depends on your benchmark. P/E was 10x at the market trough of March. So the current 15.5x is not cheap. But if we are comparing it with regional peers, it is still cheap.

Moreover, the VN-Index PE has also reached 20x for two times in 2009 and early 2018. And as we see the similarities of the current market with those two periods, there is still a 20-30% upside for the index.

How about the impact of the U.S. presidential election in the short term?

- Global markets are roaring after Biden's win. But from what we observed on Election Day, it does not seem to matter who wins.

So, you think, in the long term, whoever is elected as president of the United States will boost the U.S. economy and stock market growth? And can we expect the Vietnamese stock markets to also indirectly benefit from the growth of the U.S. stock markets?

- Let’s make it clear that the correlation between Vietnam and the U.S. markets is not high. Just look at the performance of those two markets across two years before the pandemic.

However, we are bullish with emerging markets, especially Vietnam, with Biden’s win, since investors do not like uncertainty, which Trump’s administration frequently indicated, and Biden is said to be a steady hand.

He is also said to be ready to re-negotiate CPTPP (formerly TPP), which Vietnam was excited about five years ago.

Do you want to add anything about Vietnam’s economy in general?

- We should practice caution with the U.S. Trade Representative launching Section 301 to investigate whether Vietnam has any acts, policies or practices to undervalue the currency as Vietnam is emerging among the top exporters to the United States. And export has played a key role in the economic recovery so far.

What about Vietnam’s Stock Exchange Market?

- Valuation is not expensive but not cheap either. Retail money is short-lived and Vietnam's market needs the return of foreign institutional money in the longer run.