Vietnam Daily Market Watch – HSC

Ngày đăng December 14, 2018

Market commentary – Today both bourses started the day in negative territory and never looked like crossing the gain line as selling accelerated in afternoon trading to see them close around intraday lows. Turnover returned to recent highs, however, foreign trading activity declined sharply in both percentage and absolute terms. They were net buyers again for a change in Hanoi but evenly matched in Ho Chi Minh. Market breadth widened marginally, with 23 stocks going to the ceiling and 17 stocks falling to the floor. The put through market was even more active, with put through transactions accounting for around forty percent of trades in Ho Chi Minh, and around a third of all trades in Hanoi. Put throughs were dominated by a massive trade in TCB, with large deals also seen in NVL; CII; AST and VND on HOSE. On the HNX large deals were also seen in SHS and SHB.

Foreigners were active buyers and sellers of VNM and HPG, being net buyers and net sellers respectively. Foreigners were also active buyers of CII; EIB and MSN, while actively selling CTG; E1VFVN30 and VRE.

• Bank shares with the exception of EIB which rose strongly, fell sharply again today, led by CTG; VPB and VCB.

• Non-banks shares joined the banks in the naughty corner as they fell in lock step, led by VND and BVH.

• Consumer and retail names succumbed to gravity today, led by QNS and MSN. SAB was the only stock to squeak over the gain line, while VNM; MCH and KDF all marked time.

• Tech stocks were both in retreat today.

• Manufacturing names, despite a six percent rise by TMT, joined to a lesser extent by STK; PAC; AAA and RAL, saw losers, led by steel stocks, outnumber gainers by almost two to one.

• Resource names were all lower, except for PXS, which posted strong gains.

• Real estate and construction stocks were also lower, led by DIG and DXG. SJS; CTD and KDH posted gains, while CTI failed to trouble the scorers.

• Agriproducts and aquaculture stocks were mixed to lower as gains at DPM; BFC and HNG were more than offset by losses at SBT; VHC; VFG and others. Today PAN marked time.

• Pharmaceutical stocks continued on their merry way, rising in lock step, apart from DHG which marked time.

• Utilities, transport and logistics stocks were also lower, despite gains at VNS and ACV, as losers including VSC; HVN and VJC outnumbered them by more than two to one. NT2; VSH and PPC all traded sideways.

Vietnamese stocks slide accelerates – Both the VN Index and HN Index started down at the open, with the sell-off accelerating in late afternoon trading to see the Southern bourse down close to one percent at the closing bell, while the Northern market was down by over half a percent. The VN Index did not test strong resistance at 965pt today, and a weak start to the next trading week may see further retracing to support around 930pt. While trading volumes rebounded to sound levels today, foreign participation fell dramatically. Unless these both head in the right direction the likelihood of a sustained rally remains somewhat remote.

On the Southern bourse today, VCB; CTG and GAS were providing the headwind, while there were no significant contributors of note. In Hanoi, VCG was doing the heavy lifting today, while yesterday’s villain ACB was again the standout on the wrong side of the ledger. Despite trading volatility picking up somewhat, and losses accelerating from yesterday, domestic investors still appear to have shifted their attention to small- and mid-cap issues.

The four futures contracts today, despite a fast approaching maturity date, performed more poorly than the VN30 cash index, with discounts expanding marginally. Discounts ranged from 5.7 to 7.8 index points. While the cash equity market remains not overbought on a technical basis, today’s performance in the future’s market does little to provide confidence on the direction of domestic bourses over the near- to mid-term.

Overseas, Mario Draghi, the European Central Bank’s President confirmed an end to the Eurozone’s QE program in a few weeks. This along with contraction in the FED’s balance sheet will of course put more pressure on a number of asset classes. UK struggles to achieve a Brexit deal, the FED signaling they are still considering a further rate hike, a lack of concrete news regarding US/China trade talks and uncertainty over oil prices do frame a rosy picture for emerging markets. Despite strong underlying economic fundamentals we expect that domestic bourses may remain at the mercy of negative news flows for the time being.

Asian shares & major currencies – Asian shares today fell in unison following a mixed performance on Wall Street and US bourses overnight. European exchanges were also weaker. As for currencies, the US$ (97.20) edged up from this time a day ago when measured against its trade weighted ICE index, again trading above the US$97 mark and within sight of 52-week highs. The Euro (1.1350) was buying fewer greenbacks, while the Pound Sterling (1.2619) was all but unchanged. The US currency was buying marginally more Japanese Yen (113.53), while the Chinese Yuan (6.8907) had also slipped appreciably.

Oil prices increase – Crude oil traded rebounded from this time a day ago, with the active month WTI futures crude oil contract trading up by almost US$ 1/barrel at US$ 52.26 and Brent crude also up, albeit to a lesser extent, at US$ 60.91. The International Energy Agency said in Vienna that the OPEC+ deal had put a floor on oil prices, however, it remains to be seen if trade wars, sanctions and other events will see 2019 as more or less volatile than 2018.

US sanctions on Iran start to bite as the UAE overtakes it to become the third largest OPEC producer and Indian exports fall 41 per cent from October to 276,000 bpd in November. Qatar’s official withdrawal from OPEC after 60 years of participation from its inception also marks a more turbulent period, as junior producers in OPEC feel increasingly marginalized due to the growing ties between Riyadh and Moscow. What this means for global pricing remains not entirely clear, however, growing US and Russian voices appear likely.

In global macro and general news – Data from the US overnight showed that continuing jobless claims in the week ended December 1 rose from 1,636,000 a week earlier to 1,661,000, broadly in line with market expectations. Initial jobless claims, on the other hand, fell by 27,000 to a near 49-year low of 206,000 in the week ended December 8, well below market consensus. Also in the US, import prices in November rose only 0.7% y/y sharply down from the 3.5% y/y rise a month earlier, while export prices rose 1.8% y/y in November, again well below the 3.1% y/y gain in October.

In China, YTD fixed-asset investment rose by 5.9% y/y in the January to November period, ahead of the 5.7% y/y growth seen in the first ten months of the year, and marginally ahead of market estimates calling for a 5.8% y/y rise. Chinese industrial production, however, only rose by 5.4% y/y in November, significantly below the 5.9% y/y gain a month earlier and market estimates also calling for a 5.9% y/y rise. Meanwhile Chinese retail sales rose by 8.1% y/y in November, marking the weakest reading ever. The figure was below the 8.6% rise in October and also fell short of market expectations calling for a gain of 8.8% y/y.

Japanese industrial production in October rebounded from a 2.5% y/y/ decline in September to post a 4.2% y/y gain. This was, however, in line with market expectations. Also in Japan, early estimates suggest the Nikkei Manufacturing PMI has risen to 52.4pt in December, above the 15-month low of 52.2pt in October and also ahead of market consensus of 52.3pt. In Europe, however, early estimates suggest that the IHS Markit Eurozone Composite PMI will decline to 51.3pt from 52.7pt in November. The reading points to the weakest expansion in private sector activity since November 2014, as both manufacturing looks set to decline to 51.4pt from 51.8pt, and services to 51.4pt from 53.4pt a month earlier.

Also, fresh from winning her no confidence vote, UK PM May was given a taste of reality as the, the President of the European Commission made it clear that no new legally binding obligations would be imposed on the deal already struck, and that there would also be no more renegotiation. While some reference was made to further assurances being made by the 27 members, without legally binding obligations it would appear again that PM May’s position has not altered appreciably.

HCMC – The VN index fell today as turnover expanded to VND 4,604.13 billion or US$ 197.86 million. The index lost 0.85% and closed at 952.04. 104 stocks up while 193 stocks down. And 5 stocks went to the ceiling while 5 stocks dropped to the floor. Foreigners accounted for 6.98% of the buying value and 6.99% 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 0.14 billion worth of shares in HCMC. And we saw thirty two transactions in the put through market today.

Foreigners were active buyers of CII; VNM; EIB; HPG and MSN. They also actively sold HPG; CTG; VNM; E1VFVN30 and VRE. The put through market was more active today with two enormous; two super jumbo; two jumbo; six large and some medium sized & smaller deals accounting for 39.26% of total turnover.

We saw 50,268,030 shares of TCB; 1,740,667 shares of NVL; 2,000,000 shares of CII; 772,200 shares of AST and 2,500,000 shares of VND going through. Foreigners were less active in the put through session in the CII & VNM deals and then six other smaller deals today in the market.

E1VFVN30 was down 0.71% today closing at VND 15,340.

Hanoi – The Hanoi market went down today while turnover came to VND 672.40 billion or US$ 28.90 million. The HN index was down 0.61% to close at 106.65. 75 stocks up while 76 stocks down. And 18 stocks went to the ceiling while 12 stocks dropped to the floor. Foreigners accounted for 3.32% of the buying value and 0.84% of the selling value.

Foreigners were net buyers to the tune of VND 16.65 billion worth of shares. And we saw seventeen medium and small sized deals today during more active put through session in Hanoi accounting for 35.52% of total turnover.

We saw 4,000,000 shares of SHS; 7,775,500 shares of SHB and 2,230,000 shares of VGC along with some smaller transactions in the put through market today.

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