20171206_BSC_Vietnam Monthly Review_EN_2017M11

Macroeconomic
• The PMI decrease to 51.4 points level from 51.6 pointsdue to continuos rising of inventory level.
• Total retail sales of consumer goods and services in November 2017 reached VND 344.8 trillion, up 11.7% over the same period last year.
• FDI in November increased sharply, doubling that of the previous month while the disbursed capital only increase slightly. The distribution of electricity, gas, hot water and air conditioning and manufacturing are still the two main leading sectors in attracting FDI.
• The VND/USD interbank exchange rate was maintained at the end of October, with a slight increase in volatility of 22,745 - 22,800 VND/USD. The interbank interest rates rose but these rates are currently on the downward trend, indicating that liquidity remains abundant.

Stock market
• VN-Index and HNX-Index soared in most of November. VN-Index and HNX-Index increased 13.45% and 9.1% respectively compared to October.
• Market liquidity increased 75.51% MoM, at the level of 7,668 billion VND/ session, corresponding to 336.8 million USD/session, thanks to unusual trading sessions of VNM and other stocks in divesting plan of SCIC. Foreigners net bought on HSX and HNX by VND 10,055.84 and VND 359 billion respectively.
• P/E of VN-Index and HNX-Index reached 18.65 and 13.91 respectively. P/E of HNX-Index ranked up to the 15th, P/E of VN-Index ranked up to 6th in the whole region.

Market outlook
VN-Index increased sharply and set new peak as reported in October and will actively move in the range of 900-1,000 points in December. Index may have a slight correction period early in the month to create a breakthrough momentum over the psychological resistance level of 1,000 points with the support of key stocks, the reference scenarios are as follows:

•  In the bullish case, VN-Index will surpass 1,000 points with the support of Bluechips and the rotation of large-cap stocks such as banks, real estate, consumption and production. Foreign net buying still played a major role. Bank stocks, large shares of state-owned divestments will remain the mainstay of the market. 
• In bearish case, VN-Index will return to the level below 900 points when the large stocks reach saturation, limited cash flow from domestic and foreign investors in the context of negative news from the world.

Recommended stocks:

• Large-scale, industry-leading stocks, divestments of state-owned capital, stocks that increase ownership for foreign investors, newly listed stocks.
•  Stocks with improved performance such as banks, real estate, construction.
• Stocks with low valuations and sound fundamental, the large and medium cap stocks that rising slowly or have not rising yet will catch up with the level of the VN30 and the market
• Defensive stock that are moving or are expected to improve due to rising oil, electricity, technology and consumption prices.

In the long run, BSC's recommended stocks will be listed in the Q4 / 2017 Outlook (Link), stocks with good performance are recommended in the Weekly Report on Investment Advisory (Link) and Sector/ Company Update Report (Link).