20160630_BSC_Vietnam Quarterly Review_EN_2016Q3

Macroeconomy

• June PMI was 52.6 pts, the 11 month high. Disbursed FDI reached USD1.5 billion in June; accumulated registered FDI in first half of 2016 was USD11.28 billion, up +105.4% YoY.
• June CPI was up + 0.46% MoM and +2.40% YoY. 6-month average up +1.72% YoY. Domestic VND/USD exchange rate relies on FED money policy and was not affeted significantly by Brexit thanks to surplus trade balance.
• Credit growth had better pace after slowing period in April; Deposit rates were stable while lending rates declined slightly.

Stock market

• In 6 months, VN-Index and HNX-Index enjoiyed the gain at 10.0% and 5.9% respectively while MSCI Emerging Market Index was only up 5.0% YTD and down -0.3% in Q2 và MSCI Frontier Market Index only gained 1.7% YTD và 2.7% in Q2, indicating better movement was seen in Vietnam than other peers.
• June saw net buying from foreigners at VND123 billion on HOSE and VND175 billion on HNX.
• P/E of VN-Index rise to 13.74 from 13.59 and HNX-Index declined to 10.31 from 11.29 last month.

Recomendations

• VN-Index is forecasted to traded between 605 – 640 in Q3. In July, due to Bluechips movements and positive sentiment, VN-Index will passthrough 640 pts in first week but then accumulate around 640 pts. In August, there will not much news releashed, market will enter low-lying areas of information and movements will depend on easing monetary policy of central bank. More easing will help the market to test the high at 640 pts and can go further from the 8-year peak. In September, according to our models, VN-Index is forecasted to trade nearly 620 points threshold.
• Recommended stocks:
  • Stocks with positive expected Q2 results such as Buliding materials, Technology, Cars and Pharmaceuticals.
  • Potential stocks including Real estates, Contruction, Building materials, Technology, Seaports and Ties.
  • Stocks with fundamental, high dividend, low beta.
  • Stocks openning room for foreigners, stocks with disvestment and merge and acquisition.
  • Upcom stocks might be allowed for margin trading under implementing timeline 1/7.
• Stock recomemded BOUGHT by BSC last month showed good performance including APC (+14.5%), NKG (+13.6%), PVT (+10%%), DGC (+11.6%), SVC (+10.5%), SMC (+6.6%) and VKC (+5.3%).

For further details on recomendation stocks, investors can refer to:

• Vietnam Sector Outlook 2016Q3(Link);
• Vietnam Weekly Review(Link);
• Sectors & Corporate (Link);