HSC Daily Market Watch

Ngày đăng December 8, 2018

Market commentary – The VN index increased with turnover still below recent averages. Market breadth widened while we also see that 26 stocks went to the ceiling and 22 stocks fell to the floor. Foreigners were less active net sellers to a noticeable degree. The put through market was less active with large deals in TCB & NVL and then a smaller deal in MSN seen going through.

 

Foreigners were active buyers of VNM; E1VFVN30 and MSN. And net sellers of SAB and PVD.

 

  • Bank shares were mixed with gains for VPB and VCB while there were losses for EIB and ACB.

     

 

  • Non-banks shares were broadly higher, led by brokerage stocks.

     

 

  • Consumer and retail names were all up, except a minor loss for KDF.

      

 

  • Tech stocks were all higher.

     

 

  • Manufacturing names were broadly higher, led by HSG and TMT.

     

 

  • Resource names were mixed with gains for GAS and PLX while there were losses for PVD and PVS.

     

 

  • Real estate and construction stocks were mixed to higher, led by TDH and SJS.

      

 

  • Agriproducts and aquaculture stocks were all up, except a loss for DPM.

      

 

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

      

 

  • Utilities, transport and logistics stocks were mixed with gains for NCT and PPC while there were losses for NT2 and HVN.

     

 

Vietnamese stocks edged up today – The markets today made some modest gains. VNM was the biggest gainer in index terms today while other consumer names such as MSN & BHN also advanced. Resource names such as GAS & PLX also gained a little as oil prices appeared to move higher. Then banks such as VCB; TPB; VPB and CTG all rose. 

 

On the other hand, VHM fell back after recent gains. EIB also lost after sharp gains yesterday. Resource name PVD dropped while fertilizer leader DPM declined also. Most blue chips posted small gains or losses today with no clear leaders or trend emerging. However foreigners were active net sellers today.

 

The four futures contracts made gains today ranging from 2.2 to 6.2 index points which was less than the VN30 cash index. Thus, the four contracts traded at a discount ranging from 15.4 to 17.5 index points to the cash index. This is wide by recent historical standards and suggests growing caution in the futures markets as to near term cash market direction.

 

The VN index remains strangely tied to the 100-day MA seemingly unable to breakout for the time being given a high level of uncertainty in regional markets. However, at the same time, there appears to be decent support at current levels with buyers happy to jump in on even slight weakness. However, at the higher price points the buying quickly dries up making for another day of narrow range bound trading. This typically leads to lower volumes if it continues for a couple of days.

 

Having looked quite promising earlier this week, the near-term outlook looks a lot cloudier. Given a variety of external factors ranging from trade to Brexit and of course interest rates. And with oil prices falling and the US dollar rising it becomes harder for the market to get positive traction. However, we do expect an OPEC agreement while we sense that the U.S. might attempt to mollify the Chinese to some extent so as to limit the damage from the arrest and keep trade talks on track. Then the internal macroeconomic environment in Vietnam remains bright and this is helping to put a floor on the market at current levels.

 

Asian shares & major currencies – Asian shares were mixed to higher today after Wall Street’s slight losses on Thursday after an initial sharp drop. As for currencies, the US$ (96.813) traded narrowly today when measured against its trade weighted ICE index. Then the Euro (1.1379) edged higher; Pound Sterling (1.2758) slipped; the Japanese Yen (112.83) lost a little ground while the Chinese Yuan traded narrowly at (6.8802).

 

Oil prices edge higher – Crude oil traded a little higher today with the active month WTI futures crude oil contract trading at US$ 71.77 in late Asian trade. OPEC lumbers its way towards a deal as Russians play a little hardball.

 

Oil prices fell overnight as Russia was holding out from agreeing to a supply cut deal. While Iran was also apparently looking for an exemption. OPEC had requested the Russians chip in with about 250,000-300,000 barrels of a cut from their side and the Russian oil minister had to consult directly with President Putin before responding. Seems the Russians didn’t want to cut by more than 150,000 barrels a day given that they have some large new projects coming on stream. As we went to press that issue looked very likely to end in a compromise with both sides meeting in the middle. Hence the likely size of any output cut is unlikely to exceed 1 million barrels per day. Which is less than the market perhaps had hoped for. In any event we fully expect some agreement to be announced today.

 

However, it’s important to see this number in its true context. We understand that any cut will be based on the October production number and not the current production number. OPEC accelerated production in November and therefore a 1-million-barrel a day cut might lead to an actual decline on the November number of some 1.3-1.6 million barrels a day. With Saudi Arabia alone pledging a 500,000 barrel a day cut.  Add in Alberta’s planned cut of some 325,000-350,000 and you have a meaningful number. Markets of course will initially focus on the smaller headline number. However, we think this should be enough to stabilise markets and lead to a modest price increase. 

 

In global macro and general news – Global equity markets remained rather jittery today as the fallout from the announcement of the arrest of Wanzhou Meng continues to reverberate. And then of course OPEC’s dithering over output cuts also increased the sense of uncertainty over the shorter term. Wall Street’s dramatic V-shaped move overnight certainly meant that the selling has stopped for now. However, market uncertainty remains high given the unpredictability of some key events.

 

Several U.S. officials have claimed that President Trump wasn’t aware of the imminent arrest of Huawei’s CFO during his dinner last week with President Xi. Given that the matter was being handled by the Justice Department which is supposed to operate independently of the White House. Although senior officials such as John Bolton did apparently know in advance. The investigation into Huawei dates back to 2016 according to the media.

 

This latest information looks like an attempt to create some distance between the U.S. President and the arrest itself which has clearly greatly upset the Chinese. And must surely cast a negative pall over upcoming trade talks. It also reveals the strategic nature of the U.S approach by targeting high tech Chinese companies; first ZTE and now Huawei who are seen as a long-term threat to U.S high tech players.

 

And therefore, it reminds us that even if some settlement of the trade dispute is reached in coming months the long-term relationship between both countries has changed permanently. Which means that Asian companies with a large manufacturing base in China that also export significant amounts to the U.S will have to consider their future plans. With a view to diversify or mitigate that risk by shifting some or all of that capacity elsewhere.  

 

The Brexit vote in the UK parliament will happen on the 11th December with a substantial rejection of the plan all but certain. Then things become complicated as there is no immediate plan B on offer. Markets may well be roiled short term by this given that it will unleash yet another wave of uncertainty.

 

Federal Reserve Bank Board of Governors Chairman Jerome Powell made some upbeat comments about the U.S. economy overnight. Saying the economy was growing well with job and wage growth seen. The month payroll number will be issued by the Labor Department today with consensus looking for moderating growth in new jobs. Observers are paying unusually close attention to every word that Jerome Powell utters these days seeking clues as to whether or not the Fed will pause raising interest rates after the upcoming meeting when they are expected to raise rates by another 25 bps. And consensus is increasingly convinced that the Fed will indeed pause rate hikes soon, data allowing.

 

HCMC – The VN index rose today as turnover expanded to VND 4,260.23 billion or US$ 183.08 million. The index gained 0.39% and closed at 958.59. 176 stocks up while 111 stocks down. And 8 stocks went to the ceiling while 11 stocks dropped to the floor. Foreigners accounted for 9.00% of the buying value and 10.20% 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 sellers to the tune of VND 51.08 billion worth of shares in HCMC. And we saw twenty four transactions in the put through market today.

 

Foreigners were active buyers of VNM; E1VFVN30; MSN; GAS and SAB. They also actively sold VNM; HPG; MSN; SAB and PVD. The put through market was more active today with two enormous; three super jumbo; three jumbo; two large and some medium sized & smaller deals accounting for 27.57% of total turnover.

 

We saw 23,589,030 shares of TCB; 2,050,000 shares of NVL; 1,209,000 shares of MSN; 2,350,000 shares of ROS and 414,590 shares of VNM going through. Foreigners were less active in the put through session in the VNM & SAB deals and then four other smaller deals today in the market.

 

E1VFVN30 was up 1.06% today closing at VND 15,300.

 

Hanoi –  The Hanoi market went up today while turnover came to VND 530.96 billion or US$ 22.82 million. The HN index was up 0.03% to close at 107.14. 91 stocks up while 67 stocks down. And 18 stocks went to the ceiling while 11 stocks dropped to the floor. Foreigners accounted for 4.32% of the buying value and 4.11% of the selling value.

 

Foreigners were net buyers to the tune of VND 1.09 billion worth of shares. And we saw twelve medium and small sized deals today during more active put through session in Hanoi accounting for 5.14% of total turnover.

 

We saw 2,034,025 shares of SHB; 831,310 shares of SHN and 400,000 shares of PVC along with some smaller transactions in the put through market today.

 

 

 

 

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