PetroVietnam Fertiliser tops Saigon securities' list
06-OCT-2008 Intellasia | Bloomberg
Oct 6, 2008 - 7:00:00 AM
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PetroVietnam Fertiliser & Chemical Joint-Stock Co leads the 30 stocks that Saigon Securities Inc. says will benefit the most from slowing inflation in Vietnam, the world's best-performing market in the third quarter.
PetroVietnam Fertiliser, steel maker Hoa Phat Group and two oil-services providers top the so-called SSI30 basket, Nguyen Duc Hung Linh, deputy head of analysis and investment in Hanoi at Vietnam's largest listed brokerage, said by phone yesterday. The 30 make up more than 60% by value of the 311 stocks on the nation's two exchanges.
The 30 companies "have strong fundamentals,'' Linh said. "They have gone through the difficult economic conditions in the last few months and they are still growing.''
The HCM City Stock Exchange's benchmark VN Index has rallied 26% from a 2 1/2-year low on June 20 as government measures to tame the fastest inflation in at least 16 years boosted confidence. The VN Index was the world's best performer in the third quarter, even as the deepening credit crisis fuelled a rout that wiped as much as US$7.8 trillion from global equities.
The effect of the financial crisis on Vietnam's economy has "not been significant'' because links with US credit markets are limited, the government said on its Web site October 1.
Rising inflation helped drag the 160-member VN Index down by 50% this year. The drop is the second most in Asia after China's CSI 300 Index, which tumbled 58%.
Top picks
Vietnam's central bank raised interest rates three times this year to the highest in Asia and restricted credit growth at 30% to curb gains in consumer prices. Inflation in the Southeast Asian nation fell in September for the first time since January 2007 to 27.9%.
PetroVietnam Fertiliser, the biggest company by value on the Ho Chi Minh exchange and a unit of state-run Vietnam Oil & Gas Group, leads Saigon Securities' picks because it has an expanding domestic market that is short of fertiliser supplies, with rising prices, the brokerage said in a report released on October 1.
Hoa Phat Group, a maker of steel, furniture and refrigeration equipment, whose shares have dropped 20% this year, will gain as profit increases 87% this year, the report said. PetroVietnam Drilling & Well Services Joint-Stock Co and Petroleum Technical Services Corp are third and fourth on the list of 30, Linh said.
Revenue growth for the 30 companies will drop to 17% next year from 30% for 2008, while profit growth will drop to 11% next year from 13%, because of the effect of the economic slowdown and the government's intention to tighten lending, Linh said.
Following are the 30 company picks by industry group. Tickers follow in brackets.
Basic Materials:
1. PetroVietnam Fertiliser & Chemical Joint-Stock Co (PDM
VN)
2. Dong Phu Rubber Joint-Stock Co (DPR VN)
3. Hoa Phat Group (HPG VN)
4. Tay Ninh Rubber Joint-Stock Co (TRC VN)
Consumer Goods:
5. Nam Viet Joint-Stock Co (ANV VN)
6. Kinh Do Joint-Stock Co (KDC VN)
7. Tuong An Vegetable Oil Joint-Stock Co (TAC VN)
8. Vietnam Dairy Products Joint-Stock Co (VNM VN)
Consumer Services:
9. PetroVietnam general Services Joint-Stock Co (PET VN)
Finance:
10. Asia Commercial Joint-Stock Bank (ACB VN)
11. PetroVietnam Insurance Joint-Stock Co (PVI VN)
12. Songda Urban & Industrial Zone Investment & Development
Joint-Stock Co (SJS VN)
13. Saigon Securities Inc. (SSI VN)
14. Saigon Thuong Tin Commercial Joint-Stock Bank (STB VN)
15. Thu Duc Housing Development Joint-Stock Co (TDH VN)
16. Vincom Joint-Stock Co (VIC VN)
Healthcare:
17. Hau Giang Pharmaceutical Joint-Stock Co (DHG VN)
Industrial:
18. Ho Chi Minh Infrastructure Investment Co (CII VN)
19. general Forwarding & Agency Joint-Stock Co (GMD VN)
20. Tien Phong Plastic Joint-Stock Co (NTP VN)
21. PetroVietnam Transportation Joint-Stock Co (PVT VN)
22. Refrigeration Electrical Engineering Joint-Stock Co.
(REE VN)
23. Vietnam Petroleum Transportation Joint-Stock Co (VIP
VN)
24. Vitaco Petroleum Tanker Joint-Stock Co (VTO VN)
Oil and Gas:
25. PetroVietnam Drilling & Well Services Joint-Stock Co.
(PVD
VN)
26. Petroleum Technical Services Joint-Stock Co (PVS VN)
Technology:
27. Corp for Financing & Promoting Technology (FPT VN)
28. Cables & Telecommunications Material Joint-Stock Co.
(SAM VN)
Utilities:
29. Pha Lai Thermal Power Joint-Stock Co (PPC VN)
30. Vinh Son-Song Hinh Hydropower Joint-Stock Co (VSH VN)
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