HSC Daily Market Watch

Ngày đăng October 2, 2018

 

Market commentary – The VN index recovered with turnover above recent averages. Market breadth widened while we also see that 23 stocks went to the ceiling and 13 stocks fell to the floor. Foreigners were more active net buyers to a small degree. The put through market was more active with large deals in MSN & FMC and then a smaller deal in DHG seen going through.

 

Foreigners were active buyers of MSN; DHG and SAB. And net sellers of DXG and VNM.

 

  • Bank shares were mixed with gains for BID and TCB while there were losses for ACB and MBB.       
  • Non-banks shares were mostly lower, led by BVH and VND.       
  • Consumer and retail names were mixed with gains for BHN and VNM while there were losses for KDC and KDF.      
  • Tech stocks were mixed to lower, led FPT.    

 

  • Manufacturing names were mostly lower, led by NKG and HPG.     

 

  • Resource names were mostly higher, led by GAS and PVD.     

 

  • Real estate and construction stocks were mixed to lower, led by DXG and SJS.     

 

  • Agriproducts and aquaculture stocks were mostly lower, led by HAG and HNG.     

 

  • Pharmaceutical stocks were mixed to higher, led by TRA and IMP.      

 

  • Utilities, transport and logistics stocks were mixed to lower, led by HVN and VJC.     

 

Vietnamese stocks end the day mixed – The markets were quite mixed today with a partial recovery in the VN index even as the other indices lost more ground. VIC was the biggest gainer in index points today while related issue VHM also made some gains. Bank stocks such as BID; VCB; TCB and CTG all advanced.  SAB moved higher while felllow brewer BHN made some nice gains. Manufacturer BMP made a strong move to the upside.

 

On the other hand, HPG fell back on concerns that iron ore prices may weaken given doubts over Chinese demand. PLX and PVD fell after recent gains as oil prices were flat after recent strong gains. Banks such as VPB & MBB lost out. Insurer BVH also declined. While real estate names NVL & DXG both fell.

 

The four futures contracts lost more ground although only the longest dated contract fell by more than the VN30 cash index. The discount to the cash index now ranges between 3.9-5.9. However the longest dated contract is now running at a 2 point deficit to the shortest dated contract. This makes for a mixed outlook for tomorrow. Obviously the futures market is telling us that the recent failed attempt at the 200 day MA has taken the wings out of the market’s sails in the short term. 

 

We note some positive statements on the macro outlook from senior government officials overnight with the  Minister-Head of the government office Mai Tien Dung suggesting that GDP might exceed 6.7% and that the budget deficit might come in less than 3.7%. Meanwhile, Mr. Nguyen Bich Lam, head of the General Statistics Office suggested that CPI would come in below 4% this year.

 

All of this helps to sets a positive backdrop for the stock market given the implications for corporate revenues and profitability. And provides a positive contrast between Vietnam and many other Asian and global emerging markets. Which has been useful in bringing foreign buyers back to the market in recent weeks. However none of it is news per se as the market knows the economy is doing well.

 

The VNindex’s move higher today is useful; although the broader market move in the opposite direction is not. This appeared to be due to a big move in VIC & BID while there were few other major gainers amongst the blue chips. As seen in the negative advance/decline indicators today.

 

The fact that most blue chips dropped back today may lead to a slightly more extended period of consolidation over the next day or so before the market possibly gets ready for another move to the upside. Indeed the jump in the US$ versus its trade weighted index is a complicating factor. While oil prices may have topped out for the time being also. And while Foreigners were net buyers by a very wide margin today that was mostly due to the MSN put through. And therefore is not the best guide to underlying short term sentiment.

 

Our view hasn’t changed much as we still believe that the odds of a breakout above the 200 day MA are better than even. Even so, we need to keep a close eye on the direction of the US$ and oil prices near term. Whilst also noting that the clock is ticking and investors won’t wait forever for the market to breakout.

 

Asian shares & major currencies – Asian shares were more mixed today as Wall Street also showed a more mixed trend on Monday. As for currencies, the US$ (95.659) rose today when measured against its trade weighted ICE index. Then the Euro (1.15018) traded lower on continued concerns over Italy; Pound Sterling (1.2962) fell as the ongoing Conservative Party conference is exposing wide divisions over Brexit once again; the Japanese Yen (113.73) edged higher while the Chinese Yuan last closed at (6.8688).

 

Oil prices halt for now – Crude oil traded flat today after strong overnight gains with the active month WTI futures crude oil contract trading at US$ 75.29 in late Asian trade.

 

The success of the renegotiation of the NAFTA pact boosted sentiment as concerns over a possible slowdown in demand for oil in North America in 2019 were partially lifted. Of course, concern over slowing demand in markets like China and India have not abated. However, it allows traders to focus on the main narrative of the supply hole being created by U.S. sanctions versus Iran.

 

Given that these sanctions will be in place from November 4th, the drop-in exports from Iran to the world is now happening in real time. And the scale of the impact should be known in several weeks when OPEC publishes October production and export numbers. In the most recent numbers, Iran exports are estimated to have fallen to some 1.72 million barrels a day in September, down 260,000 barrels a day from the previous month. And about 1 million barrels below the May 2018 peak.

 

Most customers such as India; Japan and South Korea have scaled their appetite back significantly and so far, the U.S has not granted any waivers. China’s position is well known and while the Iranians have hopes that several European countries might encourage their oil companies to continue to do business this might not be feasible for various technical reasons.

 

In the meantime, it’s hard to see anything that will halt the steady rise in oil prices which looks like a one way bet for the time being. Although over the short term a lot has been priced in in recent days and the market does look overbought. However, we do emphasise that this is seen as a short to medium problem lasting perhaps a quarter or two. And then consensus expects new supply to cover this shortfall sometime before the middle of next year.

 

In global macro and general news – The revised NAFTA deal has caused some mild relief in global equity markets although given the restrictions on auto trade (quota have been introduced for both autos and auto parts) the enthusiasm was somewhat muted. As this will now provide a template for U.S. to negotiate revised deals with the EU; South Korea and Japan with the threat of 25% tariffs likely being used to get agreement on strict quotas for cars or parts being imported into the U.S. 

 

President Trump has also begun to criticize Indian and Brazilian trade tactics which suggests that the list of targets is being extended. This is somewhat worrying as it leaves the impression that the current U.S administration is going down a list of nations with trade surpluses with the U.S. and targeting each in turn to get a “better deal”. 

 

HCMC – The VN index rose today as turnover expanded to VND 17,225.33 billion or US$ 741.03 million. The index gained 0.58% and closed at 1018.79. 119 stocks up while 180 stocks down. And 8 stocks went to the ceiling while 6 stocks dropped to the floor. Foreigners accounted for 69.83% of the buying value and 5.26% of the selling value.

 

Foreign buying rose in actual terms and also in percentage terms. While foreign selling also rose further in actual terms but fell in percentage terms. Foreigners turned net buyers to the tune of VND 11,123.00 billion worth of shares in HCMC. And we saw thirty one transactions in the put through market today.

 

Foreigners were active buyers of MSN; DHG; SAB; HPG and VNM. They also actively sold MSN; VJC; SAB; DXG and VNM. The put through market was more active today with five enormous; three super jumbo; three jumbo; two large and some medium sized & smaller deals accounting for 71.66% of total turnover.

 

We saw 109,899,932 shares of MSN; 13,328,000 shares of FMC; 2,707,010 shares of DHG; 12,804,398 shares of EIB and 450,000 shares of SAB going through. Foreigners were more active in the put through session in the MSN & DHG deals and then ten other smaller deals today in the market.

 

E1VFVN30 was down 0.91% today closing at VND 16,300.

 

Hanoi – The Hanoi market went down today while turnover came to VND 874.62 billion or US$ 37.63 million. The HN index was down 0.45% to close at 115. 85 stocks up while 75 stocks down. And 15 stocks went to the ceiling while 7 stocks dropped to the floor. Foreigners accounted for 1.59% of the buying value and 3.38% of the selling value.

 

Foreigners were net sellers to the tune of VND 15.698 billion worth of shares. And we saw thirteen medium and small sized deals today during more active put through session in Hanoi accounting for 0.91% of total turnover.

 

We saw 278,000 shares of TTC; 80,000 shares of AMV and 10,030 shares of ACB along with some smaller transactions in the put through market today.

 

 

 

 

We thank you for being our client,

 

en English