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TVS Weekly NewsBrief - The Vietnam Streetwise - Wk30.2018

31-07-2018 17:25:58

What’s on deck in economics? Inflation accelerates at slower pace. According to data released by the General Statistics Office (GSO), July 2018 CPI accelerated to 4.46% year-on-year (YoY), showing slower pace than the June 2018 of 4.67% YoY. The slower pace is inline with our expectation stated in our last report (TheVietnamStreetWise_Wk_22_2018) when the base effect dropped out and the core inflation (excluding the food and energy prices) was at manageable level. The annual food and transportation reached 5.00% (up from negative 2.52% last year) and 10.84% (up from 1.43% last year) respectively; contributing the most to inflation. We maintained our view that the inflationary pressures leave no room for SBV use the loose monetary policy in coming months. (Chart of the Week).   Market Watch Vietnam stock market ended week mostly flat when the earning season fading away. The Vnindex gained 2.13 points, or 0.23%, to 935.52 when almost investors discounted good 1H2018 earnings. All five of nine primary Vnindex sectors finished in positive territory. The industrials sector was a particular outperformer, gaining 1.73% while energy and consumer non-cyclicals sectors were up 1.50% and 1.19% respectively. Vietjet Air (VJC +4.40% owa) and REE Corp (REE +3.41% owa) were among the biggest boost to industrial sectors when VJC announced the 2Q2018 interim net income of USD 41mn (+44% QoQ) and REE Corp posted 1H2018 net income of USD 42mn (+42% HoH) thanks to good investment in associates like Pha Lai Thermal Power (PPC). The foreign investors continued to be net selling position with USD 22.84mn, focusing on VIC and HPG.

TVS Weekly NewsBrief - The Vietnam Streetwise - Wk28.2018

16-07-2018 18:01:28

What’s on deck in economics?1H2018 modest credit growth of 6.35%. According to data released by the General Statistics Office(GSO), 1H2018 total credit in the economy grew at a pace of 6.35% YTD, down from 7.54% YTD lastyear. It is in line with our expectation when we believe the State Bank of Vietnam (the central bank,SBV) put the 2018 credit growth target at manageable level when the full-year real GDP growthtarget of 6.7% is well within reach after marking the strongest first-half in a decade (the economygrew by 7.08% YoY in 1H2018). In the case, the SBV will remain biased towards a tight monetarypolicy stance to avoid the inflation. (Chart of the Week)Market WatchVietnam stock market extended its losing streak marking fifth weekly decline on heightened tradeconcerns. The Vnindex closed decisively lower, falling around 7.79 points, or 0.9%, to 909.8 whensome investors fear could morph into a full-on trade war. All seven of nine primary Vnindex sectorsfinished in negative territory, led by loss in basic material and consumer cyclicals, a drop in 5.79%and 3.34% respectively. The basic material sector dragged down by a decline in HPG (-3.29 %), HSG(-3.89%) and POM (-2.30%) when the investors feared about the trade war tension hitting Vietnamsteel industry. It was noteworthy that the US Department of Commerce (DoC) decided to levyimport tax on Vietnam steel in 22 May, 2018. The foreign investors continued to be net sellingposition with USD 12.98mn, focusing on VIC, MSN, and HPG.

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.