Vietnam Daily Market Watch

Ngày đăng January 17, 2019

Market commentary – After attempting to flirt with the gain line for most of the day, the VN Index slumped to an intraday day low at the bell as a late sell-off pushed the market three quarters of a percent into negative territory, and pushing it below the 905pt mark. Hanoi also closed lower, albeit to a modest degree. Turnover in Ho Chi Minh declined to less than US$100 million dollars, local investors tighten spending before Tet. Market breadth was again on the narrow side, with only 19 stocks going to the ceiling while 26 stocks fell to the floor. Foreigners were again reasonably active in percentage terms, and were again overall net buyers. The put through market declined to more normal levels, with large deals in EIB; VHM and VRE being the only deals of note.


Foreigners were active buyers and sellers of VNM; VRE and VHM, being net buyers in all cases. Foreigners were also active buyers of MSN and POW, while actively selling HPG and VJC.


  • Bank shares were again weaker led by VPB, and to a lesser degree, CTG. EIB and MBB posted solid gains, joined by TCB and ACB.



  • Non-banks shares were mixed as insurers advance while brokers, with the exception of HCM, were in retreat.



  • Consumer and retail names again had a tough day at the office, as gainers MCH and KDF were outnumbered by losers, led by SAB and PNJ, by more than two to one. BHN; QNS and MWG all marked time.



  • Tech stocks were again in retreat.



  • Manufacturing names despite strong gains by inter alia TMT; DQC and STK, traded down for the main part, led by the steelers, as well as AAA and RAL. TCM trod water.



  • Resource names succumbed to gravity today, with the exception of PVD, with PXS and GAS leading the pack down.



  • Real estate and construction stocks slumped led by VRE; DIG and CTI. There were no stocks in advance, while KBC; SJS; VIC and TDH all failed to trouble the scorers.



  • Agriproducts and aquaculture stocks could not avoid today’s sell-off, despite gains by DPM; VFG and GTN. HNG and HAG led those in retreat, while BFC marked time.



  • Pharmaceutical stocks were mixed today, as DHG rose, TRA fell and the other issues traded sideways.



  • Utilities, transport and logistics stocks were in the naughty corner, falling in lock step and led by GMD; NT2 and VSH.



Vietnamese stocks continue to slide – A late sell-off saw Ho Chi Minh slump heavily to an intraday low, in line with declines seen across regional bourses today, failing to consolidate over previous resistance at 905pt. The HN Index traded narrowly, but also edged lower than yesterday’s close. The VN30 Index best described today’s trading as 25 stocks retreated while a mere 3 names advanced. The market is not oversold, however, the mini-rally from 880pt would now appear to be open and further declines to consolidate before testing resistance at 905-910pt seems the most likely scenario.


In terms of sectors, the market was mostly agnostic in today’s sell-off, with utility and transport stocks, resources, manufacturing names and real estate and construction issues the worst hit. On the Southern bourse, BVH struggled to boost the market by a little over twenty basis points, while GAS; SAB and VRE all managed to provide headwind of around double that amount. In Hanoi, PVI and VCS were doing the heavy lifting, although contributions were modest. There were no major negative contributors, despite declines at VCG; VGC and DGC.


Performance by the four futures contracts was somewhat mixed as the shortest dated contract obviously closed the gap with the VN30 cash index at this maturity date, while longer dated contract discounts were again more than 10 index points. Foreign participation remains high in percentage terms, and, albeit to a somewhat less degree, they remain net buyers. However, local investor sentiment as we head into the holiday period remains strained, and overall turnover low.  


Asian shares & major currencies – Asian markets were mostly lower today, despite Wall Street and US bourses adding to gains overnight. As for currencies, the US$ (96.18) edged higher when measured against its trade weighted ICE index, with mixed results versus the constituent currencies. The Euro (1.1388) weakened against the US currency to a very modest degree, while the Pound Sterling (1.2872) was basically unchanged. The greenback was buying slightly more Japanese Yen (108.81) than this time a day ago, and had also firmed against the Chinese Yuan (6.7666).


Oil prices increase – Crude oil prices were somewhat mixed since the time of writing yesterday, with active month WTI futures crude oil contracts giving up some of the previous days’ gain to trade at US$ 51.98, while Brent crude advanced marginally to US$ 61.01 per barrel. In what is probably good for crude oil prices over the next year, North American oil companies, including shale producers, appear to be lowering production target in light of price downturns.


Given that previously some skepticism regarding whether the OPEC+ deal would be enough to rebalance the market came from surging North American production, as well as the likelihood of a greater than anticipated downturn in the global economy resulting from the US/China trade war, the curbing of growth from the US and Canada may be a much needed tonic for prices. Despite dramatic volatility over the past six to twelve months, it appears that, in the absence of developments such as new trade embargos materializing, some calm may have returned to the market.


In global macro and general news – A report by the Energy Information Administration (EIA) confirmed a draw on US crude oil inventories overnight, suggesting a larger draw in the order of 2.683 million barrels. This no doubt contributed to more stable conditions witnessed in the last few days. Also in the US, average import declines 1.0% y/y in December, compared with market estimates calling for a 1.3% y/y fall. It was also better than the 1.9% y/y decline a month earlier. US export prices in December rose 1.1% y/y, decelerating from the 1.8% y/y rise the previous month.


In the Eurozone, despite the overall inflation rate declining from a rise of 1.9% y/y in November to a 1.6% y/y rise in December, the figure was in line with market consensus. The core inflation rate in December, meanwhile, saw a 1.0% y/y rise, which was unchanged from the rate recorded a month ago, and also in line with market estimates. In Japan, BOJ the may be mulling lowering its 2019 inflation target of 1.4%, given inter alia a twenty percent decline in oil prices from previous assumptions, a government move to make early year education free and looming cuts to mobile phone charges.


In the UK, the Brexit vote appeared to have little impact on the most recent economic data, with core inflation growth of 1.9% y/y in December being little changed from November’s 1.8% y/y rise, which also coincided with market estimates. UK’s retail price index in December did show deceleration from a 3.2% y/y rise in November, gaining only 2.7% y/y, and compared to market estimates calling for a 2.9% y/y gain. Meanwhile declines in PPI input prices in December were pared to 1.0% y/y from a 2.6% y/y decline a month earlier, while PPI output price rise decelerated from a 3.0% rise a month earlier to a more moderate 2.5% y/y rise in December. 









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