Macro & Market QII.2019_ Divided and fluctuated according to Q2 Buiness results and international news_20190705

Macroeconomics
• Quarter II/2019 GDP increased by 6.71% YoY. Industry and construction sector has the strongest growth rate with 8.93% YoY.
• The PMI index in June 2019 increased to 52.9 from 52 in May, raising the yearly average to 52 (2018 was 53.7).
• Total retail sales of consumer goods and services in 6M2019 were estimated at VND 2,391 trillion, an increase of 11.5% compared to the same period last year.
• Total registered FDI in 6M2019 reached USD 10.35 billion (- 36.3% YoY) but total realized FDI reached 9.1 billion (+ 8.1% YoY). Manufacturing and processing industry is the main factor attracting FDI into Vietnam.
• The fluctuation range of the interbank exchange rate is in the range of 23,250 - 23,480 VND/USD in the second quarter of 2019. Interbank interest rates have strongly increased again in the last week of June when the SBV net withdrew about 43 trillion VND.

Stock Market
• VN-Index dropped 9.94 points compared to the previous month (-1.04% MoM), (+ 6.43% YtD) and HNX-Index decreased 0.84 points (-0.8% MoM), (-0.69% YtD).
• Average liquidity on 2 exchanges decreased by 5.88% compared to June 2018, and decreased to VND 4,087 billion per session. In 6 months, the average liquidity on both exchanges was VND 4,327 billion dong per session, a decrease of 31.89% compared to the average of 2018.
• In June, foreign investors bought a net of VND 484 billion on HSX, sold a net of VND 18 billion on the HNX. In the first half of 2019, foreign investors bought a net on the HSX off VND 10,143 billion and sold a net of VND 310 billion on the HNX
• VN-Index's P/E dropped to 16.45, equivalent to -0.64% MoM, + 9.46% YtD and HNX-Index fell to 7.62, respectively, -2.24% MoM, -12.54% YtD. Compared to May 2019, the P/E of the VN-Index maintained the 9th position and the HNX-Index continued to hold the 20th position in Asia.

Market outlook for the second quarter
VN-Index fluctuated in the 925 to 1,050 points range, the fluctuation central is around 950 points. We expect VN-Index to rebound to 980-1,000 points in July, if it does not exceed this price range, it will continue to narrow the movement within 940-980 points in August and September with low liquidity. Market trends in the fourth quarter will be more pronounced based on sufficient information and create a medium and long-term investment vision (to be updated at the end of the third quarter). In the third quarter, BSC offers 2 scenarios as follows:
• In positive case, VN-Index will close above 980 points at the end of the year. The movement trend is still moving around large stocks with the return of foreign capital, noting the capital flow from ETFs..
• In case of negative situation, VN-Index may drop below 940 points when encountering negative information from the world and business results do not improve.
 

Recommended stocks:

• Industries and stocks are evaluated positively in the Industry Prospects Report 2019 (Link) và (Link);
• Stocks of Ports, Textiles, Fisheries, Furniture and Industrial Zones benefited from trade agreements and production shift from trade war;
• Stocks benefit from recovering raw material prices and oil prices;
• High defensive stocks such as Electricity, Information Technology - Post, Retail consumption have high growth and dividends;;
• In the long term, BSC's recommended stocks will be mentioned in the quarterly sector strategic reports,  stocks with good changes are recommended in the weekly Investment Report (Link) and Industry/ Business update report.