Vietnam Daily Market Watch – HSC

Ngày đăng December 14, 2018

Market commentary – After starting the day up, and a brief attempt to head back to positive territory, the VN Index ended the day slightly below yesterday’s close. The HN Index was underwater from late morning trading and also closed lower. Turnover again declined by around twenty percent to be below recent averages. Market breadth narrowed further, with only 17 stocks going to the ceiling and 18 stocks falling to the floor. Foreigners were more active in percentage terms and around the same in absolute terms. They turned but net sellers in Ho Chi Minh and net buyers in Hanoi. The put through market was again active, accounting for a round a quarter of all trades. dominated by a very large deal in VNM, but with large deals also seen in NVL; TCB; PME and MSC going through.

Foreigners were active buyers and sellers of VNM; HPG; MSN and VIC, being net buyers of VNM and MSN and net sellers of the others. Foreigners were also active buyers of E1VFVN30 and active sellers of CTG.

• Bank shares went into retreat today, with the exception of STB; VPB and HDB.

• Non-banks shares were also lower, with the insurers down, while brokers were mixed as SSI made minor gains, HCM and VND trod water and VCI slumped heavily.

• Consumer and retail names were again higher led again by QNS and MCH. SAB; KDC and MWG retreated, while BHN marked time.

• Tech stocks were mixed with FPT again gaining as YEG again slid.

• Manufacturing names had a tough day at the office, as losers led by PAC; TMT and RAL outnumbered gainers BMP; HPG and TCM by more than three to one.

• Resource names were in the naughty corner today, with the exception of Gas which just managed to cross the gain line.

• Real estate and construction stocks were mixed as gainers led by SJS; DIG and CTD were all but match by losers including HBC; KBC and CTI. CII and VHM failed to trouble the scorers.

• Agriproducts and aquaculture stocks were firmer today despite losses at GTN; HNG and DPM. SBT and VHC led the gainers, while VFG marked time.

• Pharmaceutical stocks were also higher, led by DMC and, for a second day, IMP. DHG suffered minor losses while TRA sat still.

• Utilities, transport and logistics stocks were also up as losses by VNS; PPC and VJC were more than offset by gains at ACV; NT2; HVN and NCT. GMD; VSH and VSC all moved sideways.

Vietnamese stocks lower at the bell – The markets started the day where they left off yesterday but, in the end could not keep momentum going. Losses were not dramatic, however, turnover remains somewhat erratic as do foreign net buying and net selling patterns. In terms of sectors, consumer stocks, agri-related issues as well as utilities and logistics names were firm, while finance-related issues weakened and manufacturing and real estate names were also lacklustre.

In a day where stocks were trading in a relatively narrow band, VIC and VNM were the biggest contributors, albeit only to the tune of around two fifths of a percent, while SAB and VCB on the other side of the ledger made even smaller contributions. In Hanoi VCS was doing the heavy lifting, while PHP and ACB provided some very mild headwind. Today again it appears that small- and mid-cap issues may have taken some of the trading away from the large caps.

The four futures contracts were again mostly higher to make further inroads on the discounts that they currently trade at to the VN30 cash index. The gap is now down to around 5.0 to 7.3 index points. However, as noted previously, we do not see this as unusual in the run up to maturity next Thursday and, while encouraging to some extent, would not seek to place too much emphasis on it as regards signalling improved investor sentiment.

The VN Index was left hovering around the 100 day moving average today. While not technically overbought, it appears to lack momentum and, while the 200 day moving average at around 1,10pt is only around five percent above current levels, our technical analyst still sees the risk of the mid-term trend as going lower has not abated. Overseas

Asian shares & major currencies – Asian shares rose in lock step today following solid gains on Wall Street’s and US bourses overnight. As for currencies, the US$ (97.04) lost ground from this time a day ago when measured against its trade weighted ICE index, but still managed to close above the US$97 mark. The Euro (1.1372) was buying more greenbacks, as was the Pound Sterling (1.2620). The Japanese Yen (113.43) was largely unchanged against the US currency, while the Chinese Yuan rose to (6.8693) firmed noticeably.

Oil prices decrease – Crude oil traded slid today with the active month WTI futures crude oil contract trading at US$ 51.32 and Brent crude at US$60.47 at the time of writing. The large draw on crude oil stock flagged by the American Petroleum Institute (API) appears to be confirmed and further underlined by figures from the Energy Information Administration (EIA) showing a draw down on stocks, albeit to a significantly lower degree in the week ended December 7.

Despite recent hits to crude oil prices, there is an observable trend for majors such as Chevron, ConocoPhillips and others to increase upstream and downstream expenditure in 2019. Another trend appears to be significant portions of these budgets being allocated for North American shale oil projects. However, production on these projects will take time to come on stream perhaps allowing for demand from India and developing countries to shore up demand, while in the near-term, as noted below, the OPEC+ deal is already attracting questions.

In its latest Monthly Oil Market report, OPEC trimmed a further 100,000 barrels per day from its 31.5 million bpd estimate for oil demand in 2019. This is also down 1 million barrels per day from 2018. Given that average production in November stood at 32.97 million bpd, the proposed 1.2 million barrel per day proposed production cuts would still appear to be less than required to balance the market. Perhaps scepticism over relying on production issues in Libya, Nigeria and elsewhere to soak up the surplus may still be dogging prices. For example, Rystad Energy sees 700,000 bpd need to be cut somewhere for Brent crude to regain US$70 per barrel.

In global macro and general news – Industrial output in Europe in October rose 1.2% y/y, following downwardly revised growth of 0.8% y/y in September, and comfortably ahead of market estimates calling for a rise of 0.7% y/y. Also in the Eurozone, German inflation in November declined from 2.5% y/y in October to 2.3% y/y, basically in line with market consensus. While in France inflation also declined in November to 1.9% y/y from 2.2% y/y a month earlier. This was also in line with market expectations.

In the US the inflation rate in November rose 2.2% y/y, declining from the 2.5% y/y growth seen in October. As in Europe, this result was in line with market expectations, and was also the lowest reading since February. As noted above, EIA figures confirmed a draw on US crude oil inventories of 1.208 million barrels for the week ended December 7th. It was the second week of drawdowns following almost two months of builds. The EIA figure was, however, well below the 10 million plus barrel draw suggested by the API and also its own report draw of over 7 million barrels a week ago.

In the UK, despite having some 117 Tory MPs vote against her, PM Theresa May secured 63% of the vote which should put paid to another leadership challenge for a year. The PM will now have to head to Brussels to try and secure any changes to her Brexit deal required to have it passed. In particular, a key issue will be whether the PM will be able to secure legally binding pledges on her Irish backstop. While most MPs were happy to see the result, hardliners still question what has in reality changed.

HCMC – The VN index fell today as turnover narrowed to VND 3,774.59 billion or US$ 162.21 million. The index lost 0.11% and closed at 960.25. 141 stocks up while 147 stocks down. And 6 stocks went to the ceiling while 5 stocks dropped to the floor. Foreigners accounted for 20.90% of the buying value and 21.96% of the selling value.

Foreign buying fell in actual terms but rose in percentage terms. While foreign selling also rose further in actual terms and also in percentage terms. Foreigners turned net sellers to the tune of VND 40.29 billion worth of shares in HCMC. And we saw forty four transactions in the put through market today.

Foreigners were active buyers of VNM; HPG; E1VFVN30; MSN and VIC. They also actively sold VNM; HPG; VIC; CTG and MSN. The put through market was less active today with one enormous; three super jumbo; ten jumbo; four large and some medium sized & smaller deals accounting for 23.49% of total turnover.

We saw 1,579,266 shares of VNM; 1,459,140 shares of NVL; 2,941,000 shares of TCB; 747,572 shares of PME and 1,239,830 shares of HPG going through. Foreigners were more active in the put through session in the VNM & VIC deals and then twenty other smaller deals today in the market.

E1VFVN30 was up 0.65% today closing at VND 15,450.

Hanoi – The Hanoi market went down today while turnover came to VND 607.28 billion or US$ 26.10 million. The HN index was down 0.35% to close at 107.3. 55 stocks up while 84 stocks down. And 11 stocks went to the ceiling while 13 stocks dropped to the floor. Foreigners accounted for 7.52% of the buying value and 3.35% of the selling value.

Foreigners were net buyers to the tune of VND 25.35 billion worth of shares. And we saw twenty one medium and small sized deals today during less active put through session in Hanoi accounting for 24.25% of total turnover.

We saw 3,224,343 shares of MSC; 1,422,700 shares of VGC and 1,543,305 shares of SHN along with some smaller transactions in the put through market today.

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