Week 30_What motivates the market_TA_PHR, TNG, HAH, VGT, GVR_20190805

Next week strategy

VN-Index struggled at the psychological level of 1,000 points, foreign investors net sold as the end of second quarter earning season is approaching. VN-Index stood still before the psychological threshold of 1,000 points. Disadvantages of the world market, the earnings announcement season was in the final stage and foreign investors turned to net selling, preventing the index's gaining momentum. Bluechip stocks were divided and only 6/18 gained. Some groups of stocks have abnormal business results and are supported by trade war information such as industrial, retail and textile real estate which have positive movements but many stocks are under pressure of short-term profit-taking. VN-Index is in need of new growth momentum and this is not easy to determine when the information low is approaching.

The world market dropped after FED announced the rate cut as well as the US President announced to apply 10% tax to 300 billion USD of Chinese goods from September 1. FED cut the interest rate by 0.25% at the August meeting with the view of it as a midcycle adjustment. Then one day, the US president announced that a 10% tax on 300 billion Chinese goods was imposed on September 1, which led to a decline in international markets. Stock and commodity markets witnessed a decline but the monetary market did not have any significant changes. The next information of the US president's judgment will still significantly affect the market in the coming time

Some banks lowered their interest rates by 0.5% in priority areas after the interest rate of the State Bank of Vietnam reduced 0.25% of the interest rate on bonds even though it is not easy to create new low interest rates. The SBV issued 49,999 billion worth of 7-day T-bills, down 2,000 billion from the previous week. The interest rate continued to maintain 2.75% in the second week in a row. Even so, the interest rate level, however, rose for the second week to 27, 29, and 18 percentage points for overnight, 1 week, and 1 month terms. The abundant liquidity allows the SBV to increase the size of the treasury bill market, yet the signal of lowering the interest rate is not easy to establish a lower interest rate level although some state-owned commercial banks have lowered their interest rates.

93% of enterprises announced 6M earning results with net profit growth of 3.7%, Q2's NPAT improved better than the first quarter without growth. As of August 2, 693 companies, accounting for 93% of the companies listed on the 2 HSX and HNX, announced Q2 business results, bringing the 6M total of net income to VND 108,030 billion, up 3.4% over the same period. After almost no growth in the first quarter, the business result in the second quarter has improved significantly, contributing to the 6-month growth. The market differentiated when 51% of businesses grew positively and 12% of enterprises suffered losses in 6M. The VN30 group contributed 66% to the market profit, up 7.7%. Banking stocks accounted for 35% of total EAT and increased by 15.6% in 6M and were also the main contributors to the overall market growth.

The futures contracts closely follow VN30 when VN30 fluctuates and the maturity is long. The price difference between the future contracts and VN30 was -0.5%, -0.3%, 0.3% and 0.3% at all terms, slightly expanded compared to the previous week. Transaction value increased sharply on August 1, bringing the average value of the session to VND 8,574 billion/session, up 11% compared to the previous week. Open interest dropped by 2% to 21,332 contracts. VN30 is moving around the SMA100 and being supported by SMA20 and Ichimoku cloud band. The index continued to fluctuate in a range of 873 to 890 points, while the 1908 contract had 9 session to maturity. This continued to support fast trading during the session, trend investment only occurred when VN30 moved above 890 or below 873 points.

Recommend short-term trading: Monitor market movements after reducing the proportion in the last 2 weeks.
Medium and long-term investment recommendation: Maintain the current portfolio.
The stocks noted on technical analysis:
Positive changes in stocks: PHR, TNG, HAH, VGT, GVR

iInvest: Last week, Real estate & Industrial parks and Consumer goods portfolios saw impressive performance of +1.24% and +1.18% respectively, outperforming the fall of -0.23% of VNINDEX. Construction and Insurance & Securities portfolio decreased by -2.19% and -2.86%, respectively.

Next week highlights              
The second quarter business result report of listed companies is basically complete, the market is facing the empty information area in August.
The trade war continued to escalate when US president announced that he would impose a 10% tax on 300 billion USD of Chinese goods from September 1 while Japan also approved the plan to remove Korea from the list of eligible countries for minimum export control measures.
On August 5, the UK and the US announced their PMI. August 6, FOMC member Bullard spoke, New Zealand announced its monetary and interest rate policies. August 7, China's trade balance index, US crude oil reserves. 8/8, Australia central bank announced monetary policy, M2 money supply data and new loans of China. August 9, British GDP and industrial production index; Canada's unemployment index.