BSC_Monthly Report January 2014

ECONOMY
•    Consumer price index (CPI) fell 0.2% mom in Jan/2015; but still rose 0.94% yoy. The CPI is likely to get warm back in the second half of 2015. The full-year forecast is below 5% yoy.
•    The PMI (HSBC) in Jan reached 51.5 points, down from 52.7 points in Dec/2014. We forecast PMI in Feb can slow down a bit due the Lunar New Year holiday.
•    The deposit rates get difficult to reduce more, which is expected at 5-6%. However, the lending rates are still have “room” to get further fall
•    We forecast the bad debts settlement will be pushed up in the first half of 2015 due to the recent issuance of Directive No. 02

EQUITY MARKET   
•    Following the rally late last month, VNIndex increased sharply in the first half of the month and went sideways in the second half. The VN-Index and HNX-Index respectively got growth of 5.5% and 3.1% in January. The VN-Index closed at 576.1 pts while HNX-Index closed at 85.6 pts.
•    The foreign cash flows reduced quite strongly compared to the same period in 2014 when net bought 99 billion on the HSX and net sold 178 billion on the HNX. The foreign flows have not come in Vietnam as has happened periodically in the past 4 years. The ETF only bought in the first half of January and then stopped, while the non- ETF foreign investors net withdrew.

MARKET STRATEGY FOR FEB/2014
•    The limited money flow could be the main constraint for investing activities in February. The sideways movements are suitable only for the accumulation of basic stocks with good fundamentals.
•    The leading stocks and sectors, such as tires, banking, real estate, building materials, and marine transportation are recommended to buy in February.