BSC - Macro & Market Strategy Report - 2015Q3

The economy in second half of 2015 is forecasted to continue its positive growth. Exports is likely to increase over 10% and strongly contribute to economic growth thanks to the free trade agreements. Production and consumption are expected to continue to improve thanks to the low levels of price and input costs. The international organizations also have optimistic views on Vietnam's economy in 2015. The World Bank raised its forecast for GDP Vietnam in 2015 to 6% from 5.5%. The IMF also raised its forecast by 0.4% to 6%. ANZ is the most optimistic with the belief that Vietnam can exceed 6.5% growth in 2015. Besides, in recent years, GDP growth has been always higher in the later quarter of the year. Therefore, on the basis of 6.28% GDP growth for first half of the year, the target of 6.2% GDP growth in 2015 set by the Government is feasible, may even be a little low.

The stock market is forecasted to have strong growth the first half of July, correct in August and rise again in September. Adage "Sell in May, go away" did not hold this year. Following the recovery in May, Vietnam market performed actively in June with high liquidity and more short-term buying opportunities. Based on several positive factors as the stable macroeconomic, bilateral and multilateral agreements, opening room for foreigner and shorten the duration of the transaction, Vietnam market is expected to perform positively in July with large volatility. In Q3, the index is forecasted to achieve short-term peak in the first half in July, before falling and accumulating in the second half of July and August and returning to increase in September. The view is based on the market cycle, whereby VN-Index is expected to reach the previous peak from 635-640 pts with ± 3% margin in the first 2 weeks of July. The rise of bank stocks and other key stocks along with buying activities of foreigners are main motivation of the market. Strong profit-taking pressure and the decline of market liquidity will make the market correct in the second half of July and after that accumulate during August. Market is expected to rebound in September when many important policies take effects and stocks have sufficient time to accumulate to enter a strong uptrend in Q4.