20180207_BSC_Vietnam Monthly Review_EN_2018M01

Macroeconomic

• The PMI increased to 53.4 points, up 1.7% compared to the previous month.
• Total retail sales of consumer goods and services in January 2018 reached VND 361.1 trillion, up 9.5% over the same period last year .
• FDI in January decreased significantly by 36.8% over the same period last year, while the disbursed capital only increased slightly by 10.5%. The distribution of electricity, gas, hot water and air conditioning, and manufacturing were still the two main leading sectors in attracting FDI.
• The VND/USD interbank exchange rate was maintained at the end of December, with a slight decrease in volatility of 22,735 – 23,084 VND/USD. The interbank interest rate rose but their rates are currently on the downward trend, indicating that liquidity remains abundant.

Stock market

• The market movement of VN-Index and HNX-Index increased strongly in most of January. The VN-Index and HNX-Index increased 12.8% and 7.7% respectively compared to end of December.
• Average liquidity on both Exchanges increased 54.93% compared to December of 2017, and remained at VND 9,640 billion per session, correspoding to USD 423.45 million per session due to the impact of cash accumulation after two suspended trading session.
• Foreign investors had a net buying of VND 7,172 billion on the HSX and net sold of VND 418 billion on HNX.
• P/E of VN-Index and HNX-Index are 20.33 and 13.81, respectively. P/E of HNX-Index declined to 18th, P/E of VN-Index advanced to 5 in the region.

Market outlook
VN-Index moved in the range of 1,020-1,115 points. Forecasts are subject to pressure of correction in the first 1-2 weeks of February, then accumulated and recovered at the end of the month, the proposed scenarios are as follows.:

• In positive case, VN-Index stayed above the support level at 1,063 points and tested the old peak soon. The major stocks and Banking stocks are the support for the market. Foreign investors played an important role in stabilizing the index and helped to re-allocate capital and reduce the market's margin.
• In negative case, VN-Index fell to the support threshold of 1,020 points, then accumulating and recovering. The selling pressure remained strong, foreign investors reduced their net buying. The high margin continued to adjust strongly.

Recommended stocks:

• Industry sector and stocks were positively evaluated in the Industry Outlook 2018 (Link) and (Link).
• Banking and financial stocks have improved dramatically and benefited from the Law on Supporting Restructuring of Credit Institutions and NPLs;
• Real estate and construction stocks benefited from the recovery of economy;
• Stocks of Steel, Oil and gas gained from rising world fuel price;
• Leading stocks in the retail sector have high growth and dividend yields.
• In long-term, BSC's recommended stocks will be listed in the 2018 Sector Outlook (Link), Stocks with good performance are recommended in the weekly report (Link) and Industry / Enterprise Update Report (link).