BSC_Monthly Report February 2014

ECONOMY
•    Consumer price index (CPI) fell 0.05% (mom) in Feb/2015 and still rose 0.34% (yoy). The March after Lunar New Year usually has low CPI growth (even negative) because this is month the demand come back to normal after the rise in the Tet holiday. We forecast CPI in Mar/2015 will be likely to continue declining at about -0.3% to -0.2% (mom).
•    PMI (HSBC) in Feb was 51.7, up slightly from 51.5 in January. Despite the Lunar New Year holiday, the PMI has not weakened but still represented stability and this can be seen as a positive signal. We believe the PMI in the coming months will continue its positive trend thanks to the benefit from lower input costs.
•    Interest is expected to be adjusted down soon in the near future because of the Governor’ strong message, however the SBV may still need to consider some factors including the exchange rate.

EQUITY MARKET   
•    After several session of the begin of the month due to the psychological effect of applying the Circular 36, the VN-Index increased sharply and maintain into the end of the month. At the 27th February, the VN-Index closed at 592.6 points while the HNX-Index closed at 85.8 points. The stocks of the bank continue to play a leading role in the market to recovery, besides the ETF boost to buy so the market trends also made stable and increase soundly.
•    P/E of VN-Index and HNX-Index were 13.38 and 12.6, respectively, which are lower than both those of last year and those of other countries in the region. They ranked 4th and 6th positions, respectively, among the 20 countries in the region.

MARKET STRATEGY FOR MARCH/2014
•    The market is expected to perform positively in March 2015 due to the stable macroeconomic, in which interest rates can be reduced. Therefore, VN-Index is likely to break 600 pts in the first half of March and reach 610-620 pts.
•    However, the uptrend is still potentially unsustainable because of depending significantly on foreign capital and the rise of banking stocks. Internal cash flow has not yet spread significantly. We also note that foreigners, especially ETF, might stop buying in the second half of March because of Fed meeting. Thereby, the market will be correct and accumulate around 600 pts at the end of March.