Lee & Man still betting on Vietnam
Stephanie Tong and Kathy Wang; Tuesday, June 17, 2008
Lee & Man Paper Manufacturing (2314) said its investment in Vietnam will not be hindered by the country's short-term inflation crisis.
The paper and pulp maker plans to spend HK$2 billion as initial investment to build a production plant.
"Although Vietnam is facing a financial crisis, the fundamentals of the country [are] not bad. Vietnam's inflation problem will not last long," said Lee & Man CEO Raymond Lee.
Vietnam-related stocks have fallen 20 percent or more in the last two weeks. Shares of GR Vietnam Holdings (0139) have dropped 20 percent while Luks Group (Vietnam Holdings) (0366) plunged 25 percent.
"Investors offloaded Vietnam-related stocks as they feared the depreciation of the Vietnamese dong will drag down asset values," a European investment bank analyst said. But he noted not all companies that have operations in Vietnam will be impacted much. "Shares of Stella International (1836) and Yue Yuen Industrial (0551) did not drop a lot last Friday as their footwear businesses in Vietnam are in US dollars not dong," he said.
Lee & Man shares yesterday jumped 7.63 percent to HK$14.10.