BSC_Vietnam Sector Review_Q22019_EN

Dear investors,

In the context of the gloomy global economic growth, potential risks are not clear yet as (1) Trade War, (2) Brexit, these risk will be most influential on countries which are open to the global economy, including Vietnam. Moreover,  US, EU and some other countries have made certain changes in monetary / fiscal policy through more easing. This shows concern about the slowdown in global economic growth. Changing the executive view of these policies in many regions such as the US, EU, China can help the world economic growth prospects recover in the second half of 2019 and prolong the economic growth in the next stage.

Investment topic for Q22019 and 2019

In 3M.2019, thanks to supportive information on (1) Progress of trade negotiations and (2) Cash flow back to emerging markets, Vietnam's stock market has recovered substantially with other emerging markets and Asian markets. Along with that, the macro data of Vietnam in 2019 is forecasted to slow down but still at a positive level. Entering the second quarter of 2019, Vietnamese stocks continued to be complicated because the second half of the earnings announcement and the annual shareholders' meeting were unspecified risks. Specifically, the market is expected to move in a slight increase in the first half of April and then adjust the second half of April to May and recover in late May and early June. (link). Prospects for many industries in the next 1-2 years have big differences due to the macro factors on the global scale in general and the orientation of macroeconomic policies in particular. This will make the stock market continue to diverge strongly and the amplitude of fluctuation is greater than in 2018. We update the investment topics mentioned in the 2019 industry outlook report including:

First, the story of upgrade to Emerging market continue to attract foreign capital.
Secondly, the change in order of VN30 basket and forecast will have a big impact on Vn-Index in 2019.
Thirdly, listing / equitization and floor transfer plans are expected to be accelerated due to the failure of 2018 progress.
Fourth, the opportunities come from divestment of State capital in leading enterprises.
Fifth, Mid-cap stocks with different stories will receive more attention during the year. Performance of Mid-cap growth in Q1.2019 is quite similar to our early forecasts
Sixth, defensive and high-income stocks and sectors (electricity) with stable growth potential (retail, consumer, drinks)
Seventh, public investment is also one of the government's key plans to be promoted in 2019.