BSC_Vietnam Marco Market Outlook_EN_2020

High growth and stable macroeconomic is Vietnam's bright spot in 2019 despite complex development from external environment. Conversion of growth models, macro stability, administrative reform, improvement of business environment, technological innovation and integration are notable points in 2020. Vietnam has basis to maintain high and stable growth momentum, and has room to deal with negative development from the external environment.

Regarding macro in 2020, BSC forecasts GDP growth will reach 6.6%-6.8%. Macroeconomic is stable with inflation below 4%, the USD / VND exchange rate will move within a range of 0.0% -0.9% and interest rates fall by 0.25-0.5%. Production, Consumption and Trade are key drivers for growth. Public investment is expected to increase to complete the socio-economic development plan for the period 2016-2020.

Regarding market in 2020, with support from macroeconomic, Vietnam stock market remains attractive to domestic and international investors. The VN-Index is forecasted to achieve 1,100 points by the end of 2020 based on three methods:
•    Method 1_Forecast VN-Index by P/E: EPS growth will increase by 11.3%, VN-Index is forecasted to achieve 1,101.5 points (Page 38)
•    Method 2_ Forecast VN-Index by large weight stock: Target price is 1,104.4 points, maximum price of maximum price of 1,242.1 points and minimum price of 994.3 points (Page 39)
•    Method 3_ Forecast VN-Index by Technical Analysis: Maximum price is 1,265.6 points and minimum price is 800.3 points

Regarding stocks that should be invested in 2020, the stock groups considered to have advantages in 2020 include: (1) Stocks in VN30, VN Diamond, VNFIN Lead, VNFIN Select, stocks in Covered Warrant basket; (2) Stocks benefiting from infrastructure investment; (3) stocks related to equitization and divestment of State-owned enterprises; (4) Stocks with low beta and organic growth such as retail, utilities and defensive.

About issues that are sure to significantly affect the market outlook in 2020:

1. US-China trade war
2. Economic weakness of major economies
3. Election and impeachment of the president of the United States
4. Monetary policy of major economies and Vietnam
5. Public investment in 2020
6. Revised Securities Law and the ability to upgrade in global indexes
7. Currency manipulation perspective by the United States