Macro & Market April_Careful with Sell in May and go away_20200512

Macroeconomics
•     The PMI index drops to 32.7 points, continues to plummet after falling to 41.9 points in March 2020, and is lower than the 2019 average of 51.5 points.
•    Total estimated retail sales of consumer goods and services in April 2020 reached VND 293.9 trillion, down 20.5% from the previous month and down 26% from the same period last year.
•    Registered FDI reached USD 9.8 billion, up 31.46% over the same period last year while disbursed FDI reached USD  5.2 billion, down 8.77% compared to last year.
•    The interbank exchange rate in April fluctuated in the range of 23,510 - 23,650 USD/VND, down from the margin of 23,245 - 23,760 USD/VND in March. Interbank interest rate at medium term remained low. Interbank interest rates in the short term increased sharply in the first week before falling in the following weeks

Stock market
•    As of April 29, 2020, the VN-Index officially increased by 106.6 points compared to the end of last month (+ 16.09% MoM, -19.97% Ytd) and HNX-Index increased by +14.2 points (+ 15.33% MoM, + 4.22% Ytd).
•    The average liquidity on the 2 exchange decreased slightly by -5.52% compared to March 2020, reaching VND 4,779 billion/session and corresponding to nearly USD 205.11 million/session.
•    Foreign investors continued to be net sellers in April. They sold nets of VND -6,129 billion on the HSX and -405 billion on the HNX.
•    P/E of VN-Index recovered strongly to 11.83, respectively + 16.07% MoM, -21.56% Ytd, and HNX-Index rebounded to 8.56 respectively + 15.33% MoM, + 15.02% Ytd. Compared to March, P / E of VN-Index dropped to 14th place and HNX-Index increased to 19th place in Asia.

Market commentary in May
The epidemic was under control and production and business activities gradually stabilized to support the market in May. However, the market no longer had clear and favorable factors to maintain a good increase. The scenario of "Sell in May and Go away" will largely depend on the ability of the major economies to recover after the epidemic and cash flow to invest in the market. In the current context, we are cautious about short-term movements and forecast the market to move around 750 (± 50 points). BSC offers two reference scenarios as follows:
-    In a positive case, VN-Index moved above 750 points and differentiated in accordance with major investment theme related to public investment, economic production rebound.
-    In a negative case, VN-Index will return to test the old bottom if key economies do not recover as expected after the epidemic 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).