Survey: What is the most attractive shares?

36.5% of respondents said they thought that bank shares were the most secure item in the stock market. Shares of enterprises in the oil and gas industry ranked second in terms of attractiveness and profitability (12.4%), while telecommunications company shares ranked third (10.7%), followed by the real estate sector (10.4%), and power (10.3%).

Share items of high-tech enterprises ranked sixth (8.5%), followed by food processing and consumer goods, health care and other sectors, with 4.5%, 4.4% and 2.3%, respectively.

The survey’s results have not surprised any one as it coincides with what can be seen in the stock market.

The attractiveness of bank shares has been acknowledged. Local banks have been recording the highest profit levels of recent years, and foreign bankers are eyeing them as good places for making investments.

There is quite a strange thing in that bank shares attract investors in general; there seems to be no big gap between the prices of big bank shares and those of “junior” banks. In fact, the prices of ABBank, SHB (which has just shifted from a rural bank to an urban bank) and G-Bank shares are now close to the prices of Southern Bank and VIB Bank shares.

In addition, many bank share items have prices lower than the prices of shares of enterprises in other sectors.

For example, ACB (Asia Commercial Bank) shares, which have the highest price levels, now have a market value 16-18 times the face value, while other bank share items just have market prices 7-8 times the face value. Meanwhile, in the stock market, the prices of other share items are listed at 40-50, or even 60 times the face value.

Of course, the market value of share items is defined based on many factors. FPT (the Corporation for Financing and Promoting Technologies) is just a half of ACB in terms of scale, but it reported the same post tax profit in 2006 (609bil VND or 38.06mio US$). The high R/E ratio is a factor which explains why the market value of FPT shares is 50 times higher than the face value.

One year ago, shares of power companies did not attract investors; however, investors are now declaring that it is the time for power company shares. It is quite surprising that power company shares are even more attractive in the eyes of investors than shares of high-tech companies.
In the current context, real estate is still considered the most profitable business, but there also latent, big risks. That explains why TDH (Thu Duc Housing Development Company) and HBC (Hoa Binh Property Company) prices have fluctuated recently.

High-tech industries require much capital and intelligence, which can also bring valuable products and high profitability. However, the brain content in products is the biggest problem of Vietnamese companies nowadays, while the life expectancy of technologies is very short, as new technologies can be born every day.

It is quite surprising that shares of health care companies are less attractive in the eyes of investors. However, analysts said that the situation would improve.
Source: VNE