20170301_BSC_Vietnam Monthly Review_EN_2017M02

Macro economy
•    PMI increased from 51.9 to 54.2, the highest increase since May 2015. This uptrend was witnessed for 15 months, thanks to higher production output, new purchase orders and higher inventory.
•    Revenue from retail and service fell 6.5%mom after Tet holiday, yet still higher than that of last year (+7.2%). CPI increased 0.23%mom due to rising oil and gas price.
•    FDI witnessed a positive uptrend. Total registered FDI reached USD 2,028.9 million, 6.5% higher than last year. Manufacturing industry and Real Estates attracted an increasing amount of foreign capital.
•    Exchange rates fluctuated between 22,545 VND/USD – 22,790 VND/USD, due to a trade deficit of USD 1.2 billion. There were strong fluctuation in the interest rates level, but averagely lower than last month.
The stock market
•    Along with the return of speculative cash flow, VN-Index and HNX-Index increased 1.94 % and 2.8% MoM respectively with high liquidity.
•    Liquidity in February reaches VND 3,654 billion on average per trading session (+48.2% MoM). There is a net buy from both exchanges of more than VND 618 billion on HSX and VND 26 billion on HNX.
•    P/E of VN-Index and HNX-Index are respectively 16.59 and 10.88. Currently, the P/E of HNX-index is the lowest in the region, P/E of VN-index increased by one rank, up to the 9th position.
Next month market outlook
•    VN-Index is likely to fluctuate from 690 to 720 point in March. We suggest that there is a higher chance for a positive VN-Index.
    VN-Index will enter accumulation phase of 690 – 720. Speculative cash flow is likely to decrease. The investors will lock in their profit of investment in attractive stock but this activity will not spread to the whole market. The market will in correction phase in the first half of March with great fluctuation around downward trend line and recover in the second half of March.
    In a negative case, foreign investors is going to stop buying, profit  acquisition activities is going to occur at the peak of VN-Index in short-term and go back to the previous accumulative range from 650 to 690 point.
•    Stock recommendation:
    Stock group that are being privatized, new large cap IPO stocks group, fundamental stocks that have low evaluation or not yet increased in accordance to market trend.
    Stock group that is benefited from increasing price of raw material and government subsidiary programs
    Stock group belongs to Industries that have changes and expectations of increasing profitability such as consumption, construction and electricity industry
    Stock group with high dividend yield, low beta.
    For detail, please refer to:
    Vietnam Sector Review 2016 (Link),
    Vietnam Sector Outlook 2017 (Link);
    Vietnam Weekly Review(Link);
    Sector and company reports (Link);