Study into Application of Relative Valuation Model for Listed Companies in Ho Chi Minh Stock Exchange

Received: 27-05-2013

Accepted: 24-04-2014

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Issue: Vol. 12 No. 3 (2014)

Section:

KINH TẾ XÃ HỘI VÀ PHÁT TRIỂN NÔNG THÔN

How to Cite:

Giang, N., & Nhung, B. (2024). Study into Application of Relative Valuation Model for Listed Companies in Ho Chi Minh Stock Exchange. Vietnam Journal of Agricultural Sciences, 12(3), 446–455. http://testtapchi.vnua.edu.vn/index.php/vjasvn/article/view/105

Study into Application of Relative Valuation Model for Listed Companies in Ho Chi Minh Stock Exchange

Nguyen Thi Hoang Giang (*) 1 , Bui Thi Hong Nhung 1

  • 1 Khoa Kế toán và Quản trị kinh doanh, Trường Đại học Nông nghiệp Hà Nội

    • Keywords

    HOSE, relative valuation, stock market, stock returns predictability

    Abstract


    As one of the two most popular valuation models in the world, relative valuation is closely related to empirical evidence of stock return predictability. Applying this model to 307 listed companies in Ho Chi Minh Stock Exchange (HOSE) using two multiples, P/B and P/E, the study showed that investment strategies using industry’s P/E is the most successful, while those based on P/B are not, despite various modifications of peer company choices. However, in evaluating the predictive power of these multiples, P/E appeared to be statistically insignificant and P/B had an unexpectedly positive correlation coefficient with stock price fluctuations. This result suggested critical implications in establishing stock returns predictors in the research context of Vietnam stock market.

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