20170605_BSC_Vietnam Monthly Review_EN_2017M05

Macroeconomic
•    The PMI dropped to 51.6 from 54.1. Industrial production fell sharply mainly due to Mining sector continued to decline.
•    Total retail sales of consumer goods and services in May 2017 reached VND 323.5 trillion, up 11.6% over the same period last year.
•    Foreign investment in May increased slightly (+ 1.78% yoy). Manufacturing and mining are still the two leading industries in attracting FDI.
•    The current VND / USD interbank exchange rate is approximately equal to the end of April, with a slight upward trend in the range of VND 22,640 - 22,710 / USD. The interbank rates fell sharply, showing a very high liquidity in the system.
Stock market
•    Both markets were in a strong uptrend both in scores and value in May. The VN Index and HNX-Index climbed 2.8% and 4.9% respectively compared to the end of April. The market index has broken out of the historic resistance level of 9 years with strong liquidity.
•    Market liquidity in May reached an average of VND 5,034 billion / session (+ 23.11% MoM). Foreign investors were net buyers on the HSX and net sold on the HNX, with over VND 1.340 billion on the HSX and   billion on the HNX.
•    P / E of VN-Index and HNX-Index reached 15.88 and 11.38 respectively. The current P / E of the HNX-Index is in the second to last rank, P / E of the VN Index increased three places to 9th rank.
Market Outlook next month
•    VN-Index is expected to close at 730 ± 20 points, the suggested scenarios are as follows:
In bull case, VN-Index will hold over 730 points and continue to aim for new highs in the month. Banking stocks continue to be the support of the market, cash flow rotation will continue to keep the market exciting and highly liquid. Foreign net buying activity and information of opening more room for foreign investors and divestments of government will support the market
 In the bear case, the VN-Index dropped below 730 points as foreigners were not able to maintain their net buying momentum and shifted to net-selling position as FED raised interest rates, stocks such as Banking, Consumer, and Real Estate are no longer able to maintain the upward momentum.
•    Recomended stocks:
SCIC's divestment tickers, out of room stocks, newly listied large cap stocks, corrected blue-chip stocks after Q1 business results. Banking and Finance stocks will benefit from the Law on Supporting Restructure of Credit Institutions and Handling NPLs when  the National Assembly approves the law at the end of June.
SCIC's divestment, out of room stocks, newly listed large cap stocks, blue-chip stocks ahead of Q2 financial reports;
Group of stocks will be benefited from domestic support policies (anti-dumping, interest rate subsidy package etc.).
•    In the long term, BSC's recommended stocks will be mentioned in the industry Outlook Report for Q2 2017 (Link), stocks with good performance will be recommended in the Weekly Reports (Link) and sector / company Updating Reports (link).