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 Vietnamís Rubber, Sugar, Property Stocks More Promising This Year 2010

Local securities firms expect commodity stocks in the rubber, sugar and real estate industries to be highly profitable for investors this year compared to stocks of other industries.

Most listed firms in Vietnam reported good results in 2009 thanks to the Government stimulus packages but they will meet more challenges this year as the stimulus is winding down. However, enterprises in the rubber, sugar and property sectors will enjoy more favorable conditions than others, said Ngo Thanh Phat, head of the analysis department of Vietnam International Securities Co. (VIS). "The rubber industry is expected to attain strong growth in 2010 as demand and rubber prices will rise by 8% and 30% year-on-year respectively?" Phat projected.

Vietnam expects to export 750,000 tons of rubber worth US$1.5 billion this year as demand on the global market will surge due to the economic recovery, according to the Vietnam Rubber Association. Nguyen Minh Tuan from SaigonBank Berjaya Securities Co. said the rubber industry met no difficulties such as forex risks and capital source scarcity. Enterprises in the industry will be able to maintain 2009’s high profits and enjoy more advantages this year, Tuan said. A report of Saigon Securities Inc. shows that Danang Rubber Co. obtained an after-tax profit of nearly VND390 billion last year, up by 7.5 times against 2008.

The enterprise also obtained the highest rate of earnings per share on the local stock market in 2009 at VND25,300. Sugar prices are expected to soar this year as well as the nation will face a sugar shortage of around 25% while demand on the global market will remain high. "Stock prices of sugar and sugarcane companies will increase in line with the sugar price surge,?" Phat said.

As to the real estate market, brokers say the sector will make a breakthrough in the middle of the year due to Vietnam’s and the world’s economic recovery. The local property market attracted a huge flow of foreign direct investment (FDI) last year that has given a strong boost to the sector, Phat said. Many property stocks on the domestic market have returned to reasonable rates after a long period of adjustment. “This is an opportunity for investors as property stocks have a strong potential for mid- and long-term investment? Phat added.