BSC Vietnam Sector Outlook 3Q2021_EN

As of June 2021, VNIndex has remained the strong uptrend since 2020 despite of some corrections in January 2021 due to the third coronavirus wave. In addition, stable operating activities strengthened market sentiment. However, foreign investors remain the trend of net selling on HoSE to restructure the portfolio and focuses on hedging asset. Monetary and fiscal support moves by central banks and governments around the world as well as in Vietnam are still being implemented. VNIndex and HNXIndex rose 304.68 points (+27.6% YTD) and 120.2 points (+59.18% YTD) respectively as of June 30^th 2021.

In term of stock market movement, the average trading value in 6M2021 on all three stock exchanges was at the level of VND22.612 bn (USD979 mn) per session and increased +155% compared to the previous 6 months. Cash flow was spread across all big, mid and small cap. Top index contributors comprised NVL +152% YTD (+28.88 points), VHM +32% YTD (+27.68 point), HPG +69% YTD (+26.07 points), VPB +108% (+24.42 points), TCB +67% YTD (+21.34 điểm). Top index detractors included VNM -15% YTD (-8.15 points), SAB -13% YTD (-3.23 points), BVH -12% YTD (-1.12 points), HNG -26% YTD (-0.83 point), POW -11% YTD (-0.59 point).

Regarding stocks, there were 15/19 industries gaining in H1 2021.  In which, basic resources sector increased the most with total return of 63.78% YTD, notably NKG 136.67% and HSG 108.08%, technology sector inched up 58.62% YTD (FPT 73%, ELC 72.23%) and diversified financials sector gained 56.38% YTD (VND 139.82%, VCI 85.16%).

Vietnam economy have been facing the stagnation by severe impact of the fourth wave of Covid-19. Q2 2021 GDP increased 6.61% YoY from low base in 2020. Consumer sector was directly affected and declined -19.80% YoY in July. Industrial volume was slightly up at the level of 2.24%, mainly driven by social distancing in many areas. Moreover, export volume growth of +8.40% YoY was as unexpected by the difficult transportation. In contrast, import volume positively surged +29.95% YoY. In such difficult status, the government needs to push the process of public investment capital disbursement to maintain the positive growth in the rest of the year when it just reached 44.3% of 2021 plan. Meanwhile, nominal inflation of +2.64% YoY and real inflation of +0.99% YoY is the premise to maintain loosening monetary policy in H2 2021. Production and business activities are still affected by Covid-19 and possibly prolong the negative status if vaccination campaign to be not promoted.

In terms of stock market information in 2H2021, the worldwide distribution of vaccine being accelerated could open up an expectation for more comprehensive recovery of global economy.  New transaction system and products coming online in H2 2021 can help Vietnam stock market more attractive in foreign investors’ view and be upgraded in the coming years. Furthermore, the disbursement of state capital would still be key driver for Vietnam’s economy. Some other external issues also need to be monitored such as the speed of recovery or geopolitical tensions in many parts of the world.