Vietnam Daily Market Watch – HSC

Market commentary – Apart from a brief flurry at the opening bell in Hanoi, both domestic bourses spent the day below Friday’s respective closes, although the VN Index, unlike its Norther counterpart, managed to close well above the intraday low posted in early morning trading. Turnover rose to be at or slightly above recent mid-term averages. Market breadth contracted with only 16 stocks going to the ceiling and 15 stocks falling to the floor. Foreigners were overall more active in percentage and actual terms, turning net buyers on the Ho Chi Minh exchange. In Hanoi, however, they remained net sellers. The put through market was more active, rising to over two fifths of all trades in Ho Chi Minh. It was dominated by an enormous trade in TCB, with large trades in NVL; ROS and E1VFVN30 also seen going through. In Hanoi the put through market was at more normalized levels, no significant deals of note observed.

 

Foreigners were active buyers and sellers of VNM; HPG and VRE, being net buyers of VNM and net sellers of the other issues. Foreigners were also active buyers of E1VFVN30 and BID, and active net sellers of VIC and GAS.

 

  • Bank shares had a tough day at the office, with losers led by CTG; MBB and STB outnumbering gainers HDB and TCB by more than three to one. BID marked time.

     

 

  • Nonbanks shares fell in lock step, led by VCI and HCM.

     

 

  • Consumer and retail names however were mostly up again led by KDF. KDC; PNJ and MWG were in retreat, while QNS failed to trouble the scorers.

      

 

  • Tech stocks were weaker, as FPT slid while YEG marked time.

     

 

  • Manufacturing names were mixed to higher with strong gains by names such as AAA; TCM and TMT largely offset by losses focused on steel stocks. BMP; DRC and RAL all stood still.

     

 

  • Resource names with the exception of PXS, which trod water, posted strong gains led by PVD and GAS.

     

 

  • Real estate and construction stocks were again in the naughty corner, led by VRE; DXG; HBC and CTD. CII was the lone gainer, while CTI; SJS and VHM all sat on the fence.

      

 

  • Agriproducts and aquaculture stocks were mixed as gains by HNG; PAN and others were matched by losses at GTN; VHC et al. VFG failed to trouble the scorers.

      

 

  • Pharmaceutical stocks succumbed to gravity as IMP slumped heavily and was joined by DHG. DMC marked time, while TRA just managed to close over the gain line.

      

 

  • Utilities, transport and logistics stocks despite strong gains by VSH, lost ground as VJC; HVN; NT2 and others retreated. ACV didn’t get off the mark.

     

 

Vietnamese stocks weaker – Both markets were under water for most of the day, with the VN Index off by around two fifths of a percent at the close, and the HN Index finishing the day just over half a percent lower than Friday’s close. In terms of sectors financial stocks fared badly, while consumer names and resource issues took up the yoke. Turnover rose to sound levels and foreigners were net buyers overall. However, domestic investors remain somewhat skittish.

 

On the VN Index GAS contributed just over half a percent, supported by VNM which has just under that mark, while CTG and VRE were providing headwind slightly in excess of these figures. In Hanoi DL1 and PVS made marginal contributions, while there no detractors of any note. The largely balanced result for large caps suggests that mid- and small-caps were the losers today. Our technical analyst sees trading on the Southern bourse continuing in a tight band around 945-965pt, despite some signs of being marginally overbought. 930pt would appear to provide strong support. Hanoi sees strong resistance at 110pt but can find a floor at 100pt.

 

The four futures contracts fared relatively better than the cash equities market today, with discounts ranging from 8.9 to 11.7 index points. However, as the date to maturity is only a little more than a week from today, this would appear to be in line with precedent and we cannot draw to much from this result, and still see the results as suggestive of investor caution regarding the near-term market direction.

 

Given a bumpy ride on regional and global bourses, the domestic exchanges managed to finish the day respectably. However, in light of the lower trading volumes noted above and lack of commitment by foreign investors, it would be ambitious to look for a clear upward trend in the run up to Christmas and perhaps up to the Lunar New Year. Macroeconomic fundamentals remain strong, with GDP at the higher end of expectations, inflation well within expectations and stability in the currency and interest rates. However, on a regional comparison, Vietnam remains less attractive than most peers on a forward earnings basis as well as on trailing price to book.

 

Asian shares & major currencies – Asian shares were trading lower today following losses of more than two percent on Wall Street and other major US bourses on Friday. As for currencies, the US$ (96.48) slipped from this time last Friday when measured against its trade weighted ICE index. The Euro (1.1436) was buying markedly more greenbacks, while the Pound Sterling (1.2747) was a whisker lower. The US currency was buying slightly fewer Japanese Yen (112.42), but had firmed against the Chinese Yuan (6.8931).

 

Oil prices edge higher – Crude oil traded was again trading higher than the end of last week, with active month WTI futures crude oil contracts trading at US$ 52.52 at the time of writing, and Brent Crude at US62.02 per barrel. This relief comes as OPEC and its partners agreed on a last minute deal to cut production by 1.2 million barrels per day, taking effect from January. Some issues remain, given some vagueness regarding country specific quotas, as well as the fact that Iran denies it will apply to them despite most other participants of the belief that it does.

 

Russia’s Energy Minister, Alexander Novak, was also quick to douse down expectations, stating that cuts would be implemented as soon as possible in light of technical and other challenges. Some feel that this may see the 228,000 barrels per day cut that has been suggested by unofficial sources take several months to implement. Yet another wild card will be how US President Trump views this, as he has been vocal in support of low oil prices.  

 

However, with the latest US Geological Survey announced that they now believe that reserves in West Texas’ Permian Basin are essentially double previous forecasts, while oil prices seem to have found a floor, it may not signal a return to the giddy days of US$80 per barrel. Further, another barometer may be Chevron’s increase in its investment budget for 2019 to US$20 billion. This marks a departure from the last four years of year-on-year declines. The upstream budget of US$17.3 billion sees around sixty percent heading for offshore projects, but still leaves over US$7 billion earmarked for domestic production.    

 

In global macro and general news – Data released over the weekend showed that inflation in China in November rose by only 2.2% y/y, marking a 4-month low. This was lower than the October rise of 2.5% y/y, and also fell considerably short of market estimates calling for a rise in the order of October’s. Also in China, the producer price index in November slowed to a y/y rise of 2.7%. This was lower than the 3.3% y/y rise experience a month earlier, but was this time in line with market expectations.

 

Further, it was reported that China’s trade surplus widened to USD44.74 billion in November, well ahead of October’s USD34.01 billion and market consensus for a surplus of USD34.00 billion. This was the largest trade surplus since December 2017. Exports rose 5.4% y/y while imports only rose 3.0% y/y for the month. The US reached a new record high of USD35.55 billion in November from USD31.78 billion a month earlier.

 

In the US, hourly wages in November rose 3.1% y/y, unchanged from the figure in October and also in line with market expectations. The labor force participation rate also remained unchanged at 62.9%, as did the unemployment rate which was 3.7% in November and exactly in line with market expectations. Nonfarm payrolls, however, only grew by 155,000 in November of 2018, which was significantly lower than the downwardly revised 237,000 in October and market calls for a gain of 200,000. Lastly the Hughes Baker rig count decline by 10 from October to 877 and also missed market calls for 889.

 

Meanwhile, in Japan private the picture was somewhat bleak with consumption again lackluster, declining 0.2% q/q in Q3. This compared with a 0.7% q/q gain in Q2 2018, and fell below market estimates which saw a slide of only 0.1% q/q. In Q3 GDP also declined 0.6% q/q, which was the sharpest contraction since Q2 2014. The drop was faster than a preliminary estimate for a 0.3% q/q decline, and also was marginally greater than the 0.5% q/q drop expected by the market.

 

 

 

 

HCMC – The VN index fell today as turnover narrowed to VND 4,829.38 billion or US$ 207.54 million. The index lost 0.28% and closed at 955.89. 116 stocks up while 167 stocks down. And 7 stocks went to the ceiling while 8 stocks dropped to the floor. Foreigners accounted for 10.23% of the buying value and 9.38% of the selling value.

 

Foreign buying rose in actual terms and also in percentage terms. While foreign selling also rose further in actual terms but fell in percentage terms. Foreigners turned net buyers to the tune of VND 41.12 billion worth of shares in HCMC. And we saw thirty five transactions in the put through market today.

 

Foreigners were active buyers of E1VFVN30; VNM; HPG; VRE and BID. They also actively sold HPG; VIC; VNM; VRE and GAS. The put through market was more active today with two enormous; two super jumbo; five jumbo; four large and some medium sized & smaller deals accounting for 40.58% of total turnover.

 

We saw 54,545,648 shares of TCB; 1,610,980 shares of NVL; 2,220,000 shares of ROS; 3,300,000 shares of E1VFVN30 and 1,045,450 shares of HPG going through. Foreigners were more active in the put through session in the E1VFVN30 & HPG deals and then five other smaller deals today in the market.

 

E1VFVN30 was down 0.65% today closing at VND 15,200.

 

Hanoi –  The Hanoi market went down today while turnover came to VND 465.72 billion or US$ 20.01 million. The HN index was down 0.30% to close at 106.82. 62 stocks up while 76 stocks down. And 9 stocks went to the ceiling while 7 stocks dropped to the floor. Foreigners accounted for 0.90% of the buying value and 2.32% of the selling value.

 

Foreigners were net sellers to the tune of VND 6.66 billion worth of shares. And we saw sixteen medium and small sized deals today during more active put through session in Hanoi accounting for 7.07% of total turnover.

 

We saw 1,899,000 shares of SHB; 344,700 shares of RCL and 136,550 shares of ACB along with some smaller transactions in the put through market today.

 

 

 

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