Macro & Market Quarter I.2020_ Moving within the 600-800 points range_20200408

Macroeconomics
•    The gross domestic product (GDP) in the first quarter of 2020 is estimated to increase by 3.82% over the same period last year, the lowest increase of the first quarter in the period of 2011-2020.
•    The PMI index plummeted from 49 points in February, to 41.9 points in March 2020.
•    For the first quarter of 2020, total estimated retail sales of consumer goods and services reached VND 1,246.1 trillion, up 4.7% over the same period last year
•    Registered FDI in the first quarter of 2020 increased to 6.6 billion USD, up 28.9% over same period last year. Production and distribution of gas and electricity sector is the main contribution of Vietnam’s FDI.
•    Fluctuation range of the interbank exchange rate is 23,190 – 23,760 USD/VND in the first quarter of 2020. Medium-term interbank rates continued to decrease in March, short-term interbank rates remained stable around 2%.

Stock market
•    As of March 31, 2020, the VN-Index officially decreased by -219.7 points compared to the end of the previous month (-24.9% MoM) and HNX-Index also decreased similarly -16.9 points (-15.5% MoM). By the end of the first quarter, the VN-Index decreased -297.35 points (-30.9% QoQ), the HNX-Index decreased -9.87 points (-9.6% QoQ).
•    The average liquidity on the 2 exchanges increased +18% compared to February 2020, and maintained at 5,058 billion VND/session and equivalent to nearly 217 million USD/session.
•    In March, foreign investors were net sellers on the HSX with the value of VND -7,838 billion, and VND -854 billion on the HNX.
•    P/E of VN-Index dropped to 10.27, equivalent to -25.3% MoM, -33.3% QoQ and HNX-Index also returned to 7.00, respectively a decline of -15.4% MoM, -5.82% QoQ. The P/E of the HSX dropped sharply below the 5-year average.

Market outlook in Quarter II
The VN-Index's trend in the second quarter is recovered gradually. The price fluctuation range is from 600 to 800 points. VN-Index forecasts to fluctuate above 635 points in the first few weeks of April and tended to recover clearly in the second half of April. World epidemic movements in general and in Vietnam in particular, supportive policies Economic support determines the height and level of the recovery phase. BSC offers two scenarios for April as follows:

• In a positive case, VN-Index accumulates over 635 points and may increase gradually by the end of April when there is supportive information.
• In a negative case, VN-Index will continue to bottom in the accumulation area of 535-635 lasting from 2014 to 2016 if there is negative disease situation and the pressure to divest from foreign investors.

•    Recommended stocks:

• Sectors and stocks are evaluated positively in the Sector Outlook Report 2020 (Link), Banking Sector Outlook Report (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, stocks with good changes are recommended in the Weekly Report (Link) and update report for Sector/Company (link).