20170802_BSC_Vietnam Monthly Review_EN_2017M07

Macroeconomic
•    The PMI dropped to 51.7 from 52.5. Industrial production fell sharply due to the declining production of mining sector and the increase of all sector inventories.
•    Total retail sales of consumer goods and services in July 2017 reached VND 327.6 trillion, up 10.3% over the same period last year.
•    Foreign investment in July decreased sharply (-34.4% yoy). The distribution of electricity, gas, hot water and air conditioning and manufacturing are still the two leading industries in attracting FDI.
•    The VND/USD interbank rate was the same as that at the end of June, have a small upside momentum in the range VND 22,660 - 22,795 / USD. Interbank rates declined sharply indicating abundant liquidity.
Stock market
•    Both markets were in a strong correction period for the first half of July and then, moved to the rebound period at the end of July. VN-Index and HNX-Index increased respectively by 0.91% and 2.06% compared to that at the end of June.
•    The average liquidity on both exchanges increased 5.29% compared to June 2017, and remained at the 4.637 billion/session and equivalent to nearly 204.25 million USD/session.
•    Foreigner had a net purchase on HSX of VND 2,551 billion and a net sale on HNX of VND 254 billion.
•    P / E of VN-Index and HNX-Index respectively reached 16.43 and 12.47. The current P/E of the HNX-Index lowered to the bottom third rank, P/E of the VN-Index moved down to 11th rank.
 

Market Outlook next month
•    VN-Index is fluctuated cumulatively in the range 760-800 points. Forecast index increased during the first and second week of July,  and then,   diffferentiated and fluctuated cumulatively in sideway during the last two week sof Julys, suggested scenarios are as follows:

•  In the positive case VN-Index continues to move towards new highs during the year and will be maintained above 780 points in corrective period. Banking stocks continue to be the main support for the market. Foreigners continue having stable net purchase trend, focusing on newly listed stocks.
• In the negative case, VN-Index fell below 760 points as foreigners were not able to maintain their net purchase momentum and turned to be net sellers along with domestic investors before the risks of geopolitical economic turmoil. This case is considered to be very unlikely to occur.
   

• Recomended stocks:

•  Stocks and sectors that were rated as outperform in our 3rd Quater  Sector Outlook report

•  Banking and Finance stocks receieve the expectation of the market when the law supporting the restructure of credit institutions and processing bad debts was approved by the National Assembly at the end of June;
•  Group of divested shares or full room stocks that announced divestment plan or when  more room is opened;
•  Industry leading stocks in the retail sector that have high growth and dividend yields.

•    In long term, BSC's recommended stocks will be mentioned in the 2017 Sector Outlook Report(Link), 3rd quater updated report, stocks with good performance will be recommended in the Weekly Reports (Link) and sector/company Updating Reports (link).