20160317_BSC_Vietnam Monthly Review_EN_2016M02_Public

Vietnam Macro Outlook in 3/2016

Many macro factors can affect to the economic as well as manufacturing operations in March.

Most notable is the volatility of world commodity prices. Predominantly price trend rise, stretching from the energy (oil and gas), to agricultural groups (typically sugar, rubber, cattle), and especially metals group (nickel, tin , construction steel, copper, zinc ...). No sufficient elements to confirm the rise of commodity prices in the near future, but happens is positive meaning on the in short term: On the one hand, increase production costs, which push the cost of output for enterprise; On the other hand, enterprises have more advantages in managing inventories when prices rise. However, the rise in commodity prices has not show sustainability. Therefore, the positive impact on the economy from rising commodity prices can only occur in the short term.

In addittion, periodically business review at the end of Q1 and the National Assembly session in March also reveal much less about health and prospects of economic in the near future.

Market outlook in 3/2016

World markets and commodity markets continued in February complicated. The key stock index dropped to an average of 10%, oil prices fell 22% in just the first 2 weeks of February. The shift of capital flows makes the gold market, commodity, and currency fluctuations up and down very complicated. But the second half of February, along with the rise of the key commodity, stock market of the countries has recovered rapidly and a positive impact on Vietnam market which is not affected consumption psychology pole due to coincide with the Tet holiday. Ending months of trading, the major stock markets rose to return the price level at the end at January, thereby reducing the pressure of foreign investors to withdraw capital from the market. Activity of net withdrawal of foreign investors in February fell sharply compared to January. Some regional markets, foreign investors were net buyers again as Taiwan, Indonesia, Thainland and Sri Lanka. This is a positive change after a period of prolonged net withdrawal since August 2015.

Two scenarios in March:

• Scenario 1: VN-Index breakout medium-term resistance at 575-580 points, peaking 615 points, and dropped back to 580 points by the end of March. The market is an advantage strong gains thanks to by psychological stability positive performance of global markets, information support and good cash flow. The largest stocks rose less than the market respectively as Banks goup, Real estate goup and stocks of exhausted room can create effects breakout and keep momentum for VN-Index. Good liquidity increased, the rotation in the stocks gradually push up the price level.

• Scenario 2: VN-Index is expected to continue to accumulate in the range 575 -580 points. Markets lack of consensus from the large stocks from trading activities of foreign investors led trading sideways, the indicators do not go away from strong resistance. Cash flow will shift to small and medium stocks or basic stocks with low liquidity.