BSC_Monthly Report June 2015

Macroeconomic
•    The Purchasing Management Index (PMI) announced by Nikkei and Markit reached the level of 52.2 points. Despite the decrease below the record level of 54.8 points in May, this index was generally seen as a positive signal when reaching the growth level (more than 50 points) in 22 months.
•    After the first 6 months of the year, export reached 77.7 USD billion, rising by 9.3% as compared with the same period of 2014; import approached 81.5 USD billion, going up by 17.7% as compared with the same period of 2014. The trade deficit in the first 6 months was 3.7 USD billion.
•    In June, the fluctuation range of interbank foreign exchange rate was quite narrow, from 21790 – 21839 VND/USD. Meanwhile, market exchange rate fluctuated in larger range, from 21820 – 21870 VND/USD. The stability of USD in the world foreign exchange was one of major factors remaining the exchange rate stable, this month.

Stock market
•    VN-index remained the uptrend during June. At the end of the session in June 30th, VN-index closed at 593 points and HNX index closed at 84.9 points, respectively increasing 3.13% and 1.19% as compared with last month. This range is quite similar with the forecast range of 600 – 605 points in Monthly report May 2015, BSC.
•    The demand from foreign investors was one of factors keeping the market motivation to increase in June. The foreign investors bought net total of 1081 VND billion in HSX and 422 VND billion in HNX, noting three consecutive months of net buying after the net selling in 3/2015.
•    P/E of VN-index and HNX-Index respectively reached 12.64 and 11.25, still being the low level as compared with recent years and attractive as compared with other local countries.

Investment Recommendation
•    The foreign inflow is expected to be major motivation leading the market at least in the first half of July. Therefore, trading chance will continuously appear in spite of the high level of VN – index, now. The large cap group is expected to play a role as a leader of other stock groups.
•    Investors could continue to observe the market, consider to buy more when the market completes the fluctuation in the peak of 600, simultaneously, and consider to invest upon the respond of the domestic inflow.
•    The story of expanding the room for foreign investors and Decree 60 was and will be continuously the inspiration of the market uptrend in the next period. Some “full room” stocks are HCM, TCM, VSC, FPT, VNM, MBB…
•    The bilateral and multilateral agreements will continue to bring the positive effects toward sectors which have large export amount: textile, fisheries, footwear… and the seaport and logistics sector.
•    Housing law is effective from 1/7/2015, the foreigners will buy and own houses in Vietnam with more easing. This will make real estate firms receive new demand from foreign investors, leading higher selling velocity, rising the consumption of houses. Beside real estate sectors, construction season will begin in Quarter II, therefore there will be positive signals for related seasonal sectors such as construction, construction material.