But many observers feel the economy's fundamentals cannot account for the extraordinary rise. Vietnam's stock market is still small, with just 106 companies listed. Some stocks are already trading at price-to-earnings ratios of 30 to one. That means the price of one share is more than 30 times the company's earnings per share. In most markets, ratios over 20 are considered high and a sign that a market is nearing its top.
In a report issued in mid-December, the International Monetary Fund's Hanoi office cautioned investors against what it called "irrational exuberance". At the time, the VNIndex stood in the mid-700s. It has risen over 200 points since.
The governor of Vietnam's State Bank has warned that the prices of some shares involved "illusory factors." He said that many Vietnamese companies release misleading financial statements.
Dragon Capital's Scriven says while the risks are real, they are inevitable in a young market like Vietnam's.
"I think anybody who follows this equity market has got to raise their eyebrows slightly at the level of activity. Equally, I have a suspicion that it's possibly not that easy to avoid, because there are sort of growing pains, and you need to have bull markets [rising markets] and you need to have bear markets [falling markets]," he said.
At the moment, the Vietnamese market is as bullish as a bull market can be.
출처: VOA(Voice of America) news
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