20160930_BSC_Vietnam Quarterly Review_EN_2016Q4

Macro economy

• 9-month GDP growth is estimated at 5.94% YTD YoY, lower than the 6.63% in same period last year. Mining industry declined by 3.6% due to lower production output of oil and lower coal price. Agriculture has improved +0.05% YTD YoY.

• Growth of CPI was 0.54% in September after maintaining at a low level in July and August, leading to an inflation of 3.14% YoY. Sudden higher CPI due to higher educational expenditure and adjusted petrol price.

• SBV exchange rate kept upward trend established from the beginning of Q3, rose strongly in late September before Fed FOMC to decide whether to raise interest rate in September. However, exchange rate was reduced somehow in the last week of September thanks to Fed decision to keep the current interest rate

• Credit growth estimated in late September was at 10.46% YTD, only equal to 55% of what SBV planned in the beginning of 2016 and 0.3% lower than the growth of the same period in 2015

Stock market

• In Q32016, stock markets still maintained the long-term uptrend established from the beginning of 2016. VN-Index rose by 8.5% in Q3, by 21.9% from the beginning of the year while HN-Index only increase slightly by 0.32% in Q3 and more than 6.3% from the beginning of the year.

• Foreign Investors remained net buyers in Q3, kept large net sell in August and September. Considering the whole Q3, Foreign Investors have sold net of VND 3563 billion on HSX and VND 0.1 billion on HNX.

• PE of Vietnam stock markets are currently lower than regional and global markets.

Recommendations

• VN-Index is expected to fluctuate between 650 – 720 in Q4. Market liquidity and capitalization is expected to surge due to listing of large companies and divestments.

• In positive scenario, if there will be now unexpected shock from USA presidential election, VN-Index may reach new highs of the year and stay in 680 – 720 zone at year end. Bluechips will be the main driver for VN-Index to rise while market will keep divergent based on outlooks and business results of listed firms.
• In less positive scenatio, if Fed will raise interest rate in November and exchange rate and local interest raise will move in a negative way, SBV may adjust the expansionary monetary policy and VN-Index may lose increasing momentom after peaking in October or November and retreating to 650 – 660 zone.