Healthcare stocks attract investors

Healthcare stocks have moved to centre stage, receiving increasing investor attention in recent weeks. "Healthcare enterprises always post steady profits, even when the economy faces tough times," said Bien Viet Securities Co deputy director Vu Duc Nghia.

The Viet Capital Fund Management Co has also opened a fund dedicated to the sector. The Viet Capital Healthcare Fund targets investments in pharmaceutical, hospital/high-tech clinic, medical device and hospital service stocks.

The fund has total capital in the first stage of VND500 billion (US$31.25 million) with potential for further expansion and is currently open to domestic institutional investors which are reputable enterprises or financial institutions.

"The fund aims not only for long-term, sustainable profits with minimised risks for our investors, but also for opening up a new direction in areas with significant socio-economic benefits," said fund director Pham Gia Tuan. "It will also encourage the introduction of state-of-the-art diagnostic and treatment technology accompanied by high quality services for the Vietnamese people, reducing the burden on the public health sector."

According to analysts of the Viet Capital Fund Management Co, national spending on healthcare in Viet Nam is lower than in other nations, suggesting high potential for this sector’s further development.

Spending on healthcare in Viet Nam is only 1.48 per cent of GDP, while in Thailand it’s 6 per cent and in the US, 15.3 per cent.

Stock brokerages have also found that price-per-earning ratios for healthcare stock were currently around 24, compared to a total market average of 12-13.

"This rate is promising for investors in the future," Nghia said.

An anonimous teacher from the National Economic University noted that the high P/E rate was not decisive for the change of investors into healthcare stocks.

"Traders may be afraid of earning money from hot stocks like property or banking, and then losing it," he said. "Then they change to healthcare stocks."

Domestic pharmaceutical producers were still overdependent on imported materials, making it hard to keep a lid on drug prices, he said.

"But despite that, pharmaceutical enterprises still have a stable market which is enough to ensure investors a steady profit. Less is sometimes more."