Macro&Market January 2020_Opportunities in Risks_20200213

Macroeconomics
•    PMI fell back to 50.6, down from 50.8 in the previous month, and lower than the 2019 average of 51.5 points.
•    Total retail sales of consumer goods and services in January 2020 were estimated at 448.1 trillion VND, up 3.6% over the previous month and up 10.2% over the same period last year, if excluding increase in price by 7.2%
•    Registered FDI increased to 4.83 billion, up 3.89 times over the same period last year while disbursed FDI reached 1.6 billion, up 3.2% compared to last year. Foreign direct investment focused on manufacturing, distribution of electricity, gas, water, accounting for 89.7% of the total registered capital thanks to the LNG liquefied natural gas (LNG) Plant in Bac Lieu invested by Singapore investors with total registered capital of 4 billion USD.
•    The interbank USD exchange rate fluctuated between 23,180 and 23,230 USD/VND, lower than the margin of 23,190– 23,240 USD/VND in December.  Interbank interest rates of short and mid terms sharply increased in the second half of January.

Stock market
•    As of Janary 31, 2020, the VN-Index officially decreased by 24.4 points compared to the end of last month (-2.54% MoM) and HNX-Index decreased by -0.15 points (-0.15% MoM).
•    Liquidity on both exchanges decreased significantly -14.53% MoM and reached 4,139 billion VND/session and equivalent to 177.6 million USD/session.
•    Foreign investors returned to be net buyers in January. In January, foreign investors returned to a net buying on the HSX of 1,947 billion dong while net sold -34.7 billion on the HNX. 
•    P/E of VN-Index fell to 14.94, equivalent to -2.89% MoM and HNX-Index fell to 7.22, equivalent to -0.15% MoM. P/E of both exchanges recorded a slight decrease and was at a low level in the past 4 years.

Market outlook in February
Disease remains a concern and can create downward pressure of VN-Index to support levels of 925 and 880 points. However, reviewing movements of the stock market in response to past disease, as well as considering intrinsic factors of the economy and market, we believe that this decline is opening up great opportunities for investment in medium-term. VN-Index is forecasted to experience a downward pressure in the first 1-2 weeks of February with a gradual decrease intensity and will accumulate by the end of February. VN-Index price movement in February ranges from 880 points to 970 points. BSC proposes 2 scenarios as follows:

• In a positive case, VN-Index gradually rise from negative trend, accumulated above 925 points and may increase gradually above 950 by the end of the month.
• In a negative case, VN-Index may close below 900 points if disease situation is negative and the pressure to continue divesting from foreign investors.

Recommended stocks:

• Industry and stocks are evaluated positively in the Sector Outlook Report 2020 (Link);
• Stocks with improvements and positive outlook such as Banking, Retail, Information Technology - Postal and Telecommunications;
• Stocks benefiting from diseases such as Healthcare, Pharmaceutical;
• Highly defensive stocks and stock with high dividend payout;
• In the long-term, BSC's recommended stocks will be mentioned in Sector Outlook Report 2020, sto