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TVS Weekly NewsBrief - The Vietnam Streetwise - Wk26.2018

03-07-2018 11:48:06

What’s on deck in economics? Inflation accelerates to highest level since March 2017. According to data released by the General Statistics Office (GSO), June 2018 CPI accelerated to 4.67% year on year (YoY), marking the 16- month highest CPI headlines since March 2017. The data supported our view in last report (The Vietnam StreetWise Wk.052018) when the base effect dropped out and cost-push inflationary pressure came from the rise in global oil prices. The annual food and transportation reached 5.10% (up from negative 3.1% last year) and 9.73% (up from 4.22% last year) respectively; contributing the most to inflation. The inflationary pressures cemented our view that SBV has no room to use the loose monetary policy in next months. (Chart of the Week) Market Watch Vietnam stock market extended its losing streak marking third weekly decline after higher June 2018 inflation data releasing. The Vnindex closed decisively lower, falling around 22.39 points, or 2.28%, to 960.8 with the investors staying concerned over higher inflation period coming back when June 2018 inflation posted 4.67% YoY. Seven of nine primary Vnindex sectors finished in negative territory, led by loss in basic material and energy, a drop in 4.33% and 3.94% respectively. The basic material sector dragged down by a decline in HPG (-6.47 %), HT1 (-1.96%) and HSG (-4.59%) when the investors feared global trade war hitting hard to commodity. The foreign investors turned to net buying position with USD 88.91mn when they accumulated around 7.8mn newly-listed YEG stocks.

TVS Weekly NewsBrief - The Vietnam Streetwise - Wk25.2018

26-06-2018 15:22:56

What’s on deck in economics?Official VND/USD devaluated slightly by 0.83% YTD following the incline of Fed’s rate. Data collected by Thomson Reuters showed that the official dong exchange rate to the U.S dollar has devaluated slightly by 0.83% YTD in nominal term following the incline of Fed’s rate. Although the State Bank of Vietnam (SBV) reported a record-high foreign reserves of around US$ 63bn in the first four month of 2018, equal to around 3.6 months of import, we believe the VND will continue weaken in the remaining 2018 by 1-2% amid Fed’s intention to two more increases to key interest rates remaining in the year and persistent currency declines across the region. (Chart of the Week) Market Watch Vietnam stock market extended slide to retake below 1,000 level when the market fell into “correction” territory. The Vnindex closed sharply lower, falling around 33.34 points, or 3.28%, to 983.2, below 1,000 level amid no supportive information and global threats to trade. All nine primary Vnindex sectors finished in negative territory, led by loss in consumer cyclicals and energy, a drop in 5.76% and 5.68% respectively. The consumer cyclicals sector dragged down by a decline in VNM (-1.39 %), SAB (-3.94%) and MSN (-5.02%) when the investors took advantage of market bounce-back to get short-term profit. The foreign investors maintained net selling position with USD 29.19mn with VIC, HPG, VRE and MSN as top selling

TVS Weekly NewsBrief - The Vietnam Streetwise - Wk24.2018 VN

18-06-2018 17:37:43

What’s on deck in economics? Fed lifting the federal-fund rates to a range of 1.75% - 2% for second time in 2018. The Federal Reserve on Wednesday lifted rates by a quarter-percentage point — to a range of 1.75% to 2%; signaling, perhaps, two more increases to key interest rates remaining in the year. The rise in rate hinted foreign capital outflow from Vietnam through “carry trade” traders, in our view. Weekly average O/N rate edged down to 1.43% while the central bank withdrew a hefty value of VND 47,700 via T-bill issuance. The weekly average O/N rate fell slightly to 1.43%, from 1.6% last week. The lower O/N rate implied the back-to-normal liquidity in banking system. The central bank turned to net-withdrawal position at large scale of VND 47,700bn through T-bill issuance. It noted that T-bill was with longer tenor of 28 days and 91 days, instead of 7 days. It implies that the SBV do not wish to inject more money in next 3 months. Market Watch Vietnam stock market retreated to close lower when the investors increased their profit-taking activities. The Vnindex fell in correction territory after two-week winning streak when the investors increased their profit-taking activities as well as received no supportive macro news. Admittedly, the Vnindex fell 22.5 points, or 2.17%, to close 1016.5. All nine primary Vnindex sectors finished in negative territory, led by loss in financials and basic materials, a drop in 2.96% and 2.72% respectively. The financial sector dragged down by a decline in VHM (-2.96 %), TCB (-1.22%) and CTG (-5.18%) when the investors following “buy on dip” strategy to take short-term profit. The foreign investors turned to be net seller with USD 63.83mn, focusing on VIC and HPG, when it is the last week for ETF quarterly portfolio rebalance.   

TVS Weekly NewsBrief - The Vietnam Streetwise - Wk22.2018

05-06-2018 10:01:46

What’s on deck in economics? Inflation accelerates to highest level since April 2017. According to data released by the General Statistics Office (GSO), May 2018 CPI accelerated to 3.86% year on year (YoY), marking the 12-month highest CPI headlines since April 2017. The data supported our view in last report (The Vietnam StreetWise Wk.052018) when the base effect dropped out and cost-push inflationary pressure came from the rise in global oil prices. The annual food and transportation reached 3.36% (up from negative 2.31% last year) and 7.83% (down from 8.10% last year); contributing the most to inflation. The inflationary pressures is expected to leave no room for SBV use the loose monetary policy. We, however, expect the inflation will trend upward at slower pace when core inflation, which excludes food and energy prices, registered to 1.37% YoY, the manageable level. (Chart of the Week)   Market Watch Vietnam stock market turns corner as inflation risks are already priced in. The Vnindex seems to have turned the corner, overcoming concerns about inflation, as witnessed by solid weekly gain. Admittedly, the Vnindex rose 28.97 points, or 3.01%, to close at 992.8 above the key level of 943.68 (weekly MA50) when the investors left the higher May inflation of 3.81 YoY behind. The investor welcomed the higher index when they weighted on the coming 1H2018 earning season. 6/9 sectors finished in positive territory. The financial and basic material led the gain, up 6.18% and 4.79% respectively. In financial sector, VIC (+11.08%) and VCB (+13.87%) were notable gainers when VIC welcomed listing of subsidiary Vinhomes and VCB got foreign investors following “buy on dip” strategy. The foreign investors continued to be net seller of hefty value of USD 47.67mn following the money outflow from frontier market due to mounting concern over Argentina high-inflation economy as well as taking the profit.

TVS Weekly NewsBrief - The Vietnam Streetwise - Wk19.2018

15-05-2018 14:15:20

What’s on deck in economics? The state budget is on track for fiscal consolidation. Data released by Ministry of Finance (MoF) showed that the budget was on track for fiscal consolidation. On the revenue side, the government collected USD 19.63bn, marking a 12.1% YoY increase, owing to improved local tax collection (+14.5%) and rising crude oil collection (+27%) in spite of lowing customs revenue (-4.1%) resulting from applying ASEAN duty-free regime. On the expenditure side, the government spent USD 18.03bn, representing a slight 4.6% YoY increase, largely owing to a 5.2% drop in investment expenditure. The faster pace of revenue collection leaves the budget surplus of USD 1.6bn. The minor surplus underpins fiscal consolidation in 2018 as the government seeks to rein in the country’s ratio of public debt to GDP. (Chart of the Week)   Market Watch Vietnam stock market eked out a modest gain, snapping 04-week losing streak. The Vnindex was up 18.05 points, or 1.76%, to 1044.8; ending 04-week losing streak. In our view, it is only the weekly correction after AGM and earning season factors fading. The energy sector had been the biggest gainer (+8.21%) of which notable gainers was GAS (+13.33% owa), following US President’s decision to pull out of a multilateral nuclear deal with Iran, leaving the oil price retreat from its highest level since 2014. The industrial sector helped to push index into positive territory, led by FLC (+9.81%), VJC (+7.28%) and CTD (7.55%). The foreign investors turned to net buyers with modest value of USD 6.38mn.

FW: PMG [NOT-RATED] - Aggressive Southward Expansion as Main Catalysts - AGM Notes - 26 April 2018

26-04-2018 11:52:04

We attended PMG’s AGM with the following key points: 2017 Performance: Strong Growth after M&A with V-Gas. ·         PMG posted strong growth in 2017. Revenue achieved VND 886bn (+98% YoY) and net profit after tax reached VND 49bn (+119% YoY). The top-line and bottom–line both exceeded 61% and 49% of the 2017 plan, respectively. ·         Maintaining dominant position in Central region. PMG’s current market covers from Hue province to South-West, locating in Vietnam Central region, in which Hue province accounts for 90% market share, followed Quang Nam - Binh Dinh province (>75%), Highland (>50%), Dong Nai province and Ba Ria province (>45%), Ho Chi Minh city and South-West region (20-30%). ·         Higher new entry barrier from Decree 19-2017/NQ-CP. Ministry of Finance (MoF) implemented the new requirements for gas distribution sector. In particular, MoF required gas distributors must have at least 100,000 gas cylinders, and 300m3 storage. ·         Stock dividend payment: The company will pay 15% of stock dividend. 2018 – 2020 onwards Plan – M&A and market share expansion are the main catalysts. ·         In 2018, the company sets a revenue of VND 1,062bn (+20% YoY), NPAT of VND 58bn (+15% YoY) and dividend payment of 15-20%. ·         Southward expansion after M&A with V-GAS. It aims to gain more Southern market share and develop its brand name through horizontal merger with V-Gas. The region is a promising market due to high population density compared with Central and Highland regions. ·         High demand due to low gas consumption per capita. Vietnam has lowest gas consumption per capita (116 m3) compared with region such as Malaysia (1,300 m3) and Thailand (778 m3). This creates more room for growth for gas distribution business in Vietnam. ·         In 2020, the company’s revenue is projected to achieve VND 2,000bn, with a CAGR of 46.78%.

TVS Weekly NewsBrief - The Vietnam Streetwise - Wk13.2018 VN

02-04-2018 11:11:17

What’s on deck in economics? 1Q2018 Vietnam economy started strong foot. Data released by General Statistics Office (GSO) on March, 29 2018 confirmed the Vietnam economy is doing well. The real GDP growth came in at a strong 7.4% YoY in 1Q2018. It appears that the strong momentum in manufacturing has carried over into the start of 2018, with output growing by 13.6% YoY while the mining sector on the road to recovery recorded growth by 0.4%, ending the double-digit contraction (10% YoY) since 1Q2017. Agriculture sector also recorded its 6-year high of 4.05%. Services sector growth came in at a modest 6.7%, on a par with the 6.5% last year. The first quarter robust outturn means that the full-year real GDP growth target of 6.7% is well within reach. Although economic activities remains strong in 1Q2018, the consumer price index (CPI) dipped in March for the first time since June 2017, leaving the inflation increased by 2.66% YoY (or 0.97% YTD). It appears to be simply an ironing-out of Tet holiday-related factors. (Chart of the Week)  Market Watch Vietnam stock market logged six winning streak with technology and financial sectors leading the rally. The VNindex was on track for sixth weekly gain in a row. The Vnindex was up 20.87 points, or 1.81%, to finish weekly record above 1174 since 2007. The index clinched its sixth straight weekly advance since Tet Eve. The smart money was on rotational buying ahead of 1Q2018 earnings and AGM seasons. The technology sector rallied 4.47% of which notable gainers was CMG (+13.19% owa). The financial sector helped to push index into positive territory, led by VIC (+7.07%) and VRE (2.54%). The surge in VIC’s stock marked the Vingroup as the first-time largest market capital, surpassing Vinamilk. The foreign investors turned to net selling value of USD 1.19mn to log 1Q2018 profit/loss in Net Asset Value (NAV) report