HSC Daily Market Watch

Market commentary – The VN Index started the day strongly, but gave early gains as the day went on, finishing the day a little over a third of a percent below yesterday’s close. The HN Index remained above the gain line, but followed a similar pattern to the Southern bourse, closing up less than a tenth of a percent. Turnover declined again to pre-2017 levels. Market breadth rebounded somewhat as 21 stocks went to the ceiling and 21 stocks fell to the floor. Foreigners were slightly less active than a day ago, again remaining net buyers in the South but net sellers in the North. The put through market remained at unremarkable levels, with large deals in SBT and VNM the only ones of any note.

 

Foreigners were active buyers of VNM and VIC, being net buyers and net sellers respectively. Foreigners were also active buyers of VHM; VCB and VJC, while actively selling HPG; GAS and SAB.

 

  • Bank shares slumped again led by BID and STB. CTG; ACB and MBB managed to post small gains, while EIB marked time.

     

 

  • Non-banks shares were mixed again, as BVH and VND fell and PVI and SSI advanced, while HCM and VCI failed to trouble the scorers.

     

 

  • Consumer and retail names despite heavy losses at PNJ were marginally improved led by MCH and KDF. SAB trod water.

      

 

  • Tech stocks were lower today, as YEG shed yesterday’s gains.

      

 

  • Manufacturing names were in the naughty corner again, led by the steelers, as well as RAL and AAA. TMT again managed to post gains, joined only by STK.

     

 

  • Resource names fell in lock step, with the exception of PXS which failed to trouble the scorers.

      

 

  • Real estate and construction stocks were essentially mixed, with losers led by SJS and HBC largely offset by gainers led by KDH and NLG. CTI sat on the fence.

      

 

  • Agriproducts and aquaculture stocks were in retreat, led by HAG; SBT and GTN. DPM put on strong gains, as did VFG.

      

 

  • Pharmaceutical stocks were higher today, led by IMP.

     

 

  • Utilities, transport and logistics stocks recovered somewhat, as losers led by VSH were outnumbered by gainers led by HVN and VJC. PPC and VNS marked time.

       

 

Vietnamese stocks resume a holding pattern – Both markets bolted out of the gates but gradually gave up ground as the day progressed. As mentioned, previously, 930pt remains a key psychological barrier for the Ho Chi Minh exchange, while in Hanoi also momentum has proven impossible to sustain. Foreign investors remained net buyers overall, however, volumes declined again, making the likelihood of a sustained rally in the near future slim in our opinion.

 

On the Ho Chi Minh exchange, VJC pushed the needle but by less than half a percent, while VNM; GAS and HPG provided as much or more headwind. In the North, there were no contributors of any note, while PVS made the largest negative contribution. In terms of sectors, real estate and construction stocks were the best performers. Most other sectors were mixed, although the manufacturing sector again continued to struggle. The four futures contracts continued to trade at a significant discount to the cash equities market, with no respite evident in the near-term.  

 

Large cap stocks continue to dominate trading, with little meaningful rotation. The possibility that good news from the G20 could alleviate trade decline tensions, provide support for oil prices and other factors that would help support emerging market equity markets may help to move indices higher. However, much depends on the nature of any agreement. Vietnam’s manufacturing sector would still appear to be resilient even if news from the G20 is less than optimal, however, global money managers are likely to remain cautious given the chaos in many asset classes, especially in emerging markets.

 

Asian shares & major currencies – Asian shares were mixed to down today, despite sharp gain on Wall Street and other US bourses overnight. The former saw advancing stocks outnumber losers by four to one. As for currencies, the US$ (96.74) declined today when measured against its trade weighted ICE index. The Euro (1.1384) was buying noticeably more greenbacks, as was the Pound Sterling (1.2834).The US currency lost a small amount of ground to the Japanese Yen (113.24), while the Chinese Yuan also firmed  (6.9369).

 

Oil prices move a little lower – Crude oil resumed its descent today, with active month WTI futures contracts trading at US$ 50.79 and Brent Crude trading at US$59.43 per barrel at the time of writing. Traders are hoping for good news from discussions between President Trump and President Xi Jinping at the upcoming G20 summit, as a resolution to the trade friction between China and the US would go a long way to providing comfort to global oil markets.

 

Following the American Petroleum Institute (API) estimate that U.S crude oil inventories rose 3.453 million barrels for the week ending November 23rd, the Energy Information Administration (EIA) gave their estimate of a 3.577 million barrel build in the same week, following a 4.851 million barrel build the week before. Production cuts to alleviate the situation have also not been finalized, with some pundits feeling that there is still a risk that agreement will not be reached in the near-term.

 

However, on a brighter note, while JP Morgan cut its 2019 forecast by over US$10 per barrel, the new target is still at US$ 73 per barrel, or significantly higher than current levels. Ashburton Global Energy Fund manager Richard Robinson also sees closer to US$ 80 per barrel next year given tighter markets driven by a normalization of inventories, tighter spare capacity and less new oil production from conventional projects.

 

In global macro and general news – Preliminary numbers indicate that US corporate profits in Q3 2018 rose 3.3% q/q, significantly ahead of both the Q2 rise of 2.1% q/q and market estimates calling for a rise of 2.0% q/q. Estimates of Q3 GDP growth also point to a buoyant economy with 3.5% q/q growth, following 4.2% q/q growth in the previous period, which was also the highest recorded figure since Q3 2014. Sales of new single-family houses in the US in October declined 8.9% m/m to 544,000 homes. It fell below September’s gain of 1.0% m/m and below consensus calls for a 3.7% rise.

 

Still in the US, wholesale inventories rose 0.7% m/m in October, following a 0.6% m/m rise in September and ahead of market calls for a 0.5% m/m rise. Lastly, as noted above, the EIA released its findings of a 3.577 million barrel build in US crude oil stocks in the week ended November 23. It was well ahead of market estimates, albeit lower than the 4.851 million barrel build a week earlier, and added more to oil price woes.

 

There was good news for retail sales in Japan in October, with a rise of 3.5% y/y marking the fastest rate of expansion in ten months. It exceeded the 2.2% y/y gain in September by a wide margin, and was also well ahead of market expectations for a 2.6% y/y rise. Also in japan, in a somewhat contradictory speech, BoJ board Member Takako Masai stressed the need to maintain the country’s loose fiscal policy, while then suggesting that they need to be aware of potential risks from prolonged fiscal easing.

 

Meanwhile, in Germany the seasonally adjusted harmonized unemployment rate in October declined marginally from 3.4% in September to 3.3%. This marked the lowest jobless rate since June 1980. While over in the UK, mortgage approvals in October increased from 65,269 in September to 67,090, ahead of market estimates calling for around 64,500-65,000. Mortgage lending also advanced to GBP4.12 billion in October, from GBP3.89 billion, and again slightly ahead of forecasts for around GBP3.5-4.0 billion.

 

 

 

 

 

 

 

 

 

HCMC – The VN index fell today as turnover narrowed to VND 2,807.95 billion or US$ 120.67 million. The index lost 0.37% and closed at 926.79. 121 stocks up while 165 stocks down. And 10 stocks went to the ceiling while 6 stocks dropped to the floor. Foreigners accounted for 16.58% of the buying value and 13.13% of the selling value.

 

Foreign buying fell in actual terms and also in percentage terms. While foreign selling also fell further in actual terms and also in percentage terms. Foreigners turned net buyers to the tune of VND 96.87 billion worth of shares in HCMC. And we saw twenty seven transactions in the put through market today.

 

Foreigners were active buyers of VNM; VHM; VCB; VJC and VIC. They also actively sold VNM; HPG; GAS; VIC and SAB. The put through market was less active today with two super jumbo; six jumbo; three large and some medium sized & smaller deals accounting for 10.72% of total turnover.

 

We saw 3,397,190 shares of SBT; 468,260 shares of VNM; 2,402,000 shares of LMH; 550,000 shares of REE and 700,000 shares of TTB going through. Foreigners were more active in the put through session in the VNM & HPG deals and then nine other smaller deals today in the market.

 

E1VFVN30 was unchanged today closing at VND 14,780.

 

Hanoi – The Hanoi market went up today while turnover came to VND 393.53 billion or US$ 16.91 million. The HN index was up 0.07% to close at 104.17. 81 stocks up while 66 stocks down. And 11 stocks went to the ceiling while 15 stocks dropped to the floor. Foreigners accounted for 1.39% of the buying value and 4.02% of the selling value.

 

Foreigners were net sellers to the tune of VND 10.35 billion worth of shares. And we saw twelve medium and small sized deals today during less active put through session in Hanoi accounting for 1.90% of total turnover.

 

We saw 110,000 shares of FDT; 59,000 shares of VGC and 180,000 shares of KDM along with some smaller transactions in the put through market today.

 

 

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