Macro 2018M4_The story of believe_EN_20180503

Macroeconomics
•    PMI in April increased to 52.7 points, equivalent to 2.13% compared to last month and decrease 2.59% yoy.
•    Total retail sales of consumer goods and services in April 2018 were estimated at VND 350.5 trillion, increased 1.7% from the previous month and up 9.5% yoy.
•    Total registered FDI in April 2018 declined 37.3% over the same period in 2017 however the capital rose by 6.3%. Real estates and manufacturing are the two leading industries in attracting FDI.
•    The interbank rate in April slightly increased and fluctuated between VND 22,800-22,845 VND/USD, decreased compares to the range previously of 22,785 – 23,850 VND/USD. The interbank rate tended to increase due to the demand before the holidays.

Stock market
•    Market movement of both VN-Index and HNX-Index were relatively negative in April when they fell markedly, VN-Index and HNX-Index lost -10.58% MoM and -4.23% MoM, respectively.
•    The average trading value on both exchanges increased by 0.92% compared to March 2018, and remained at VND 8,354 billion/session equivalent to USD 367 million/session.
•    Foreigners were net buyers on both HSX and HNX with VND 1,495.64 billion and VND175 billion respectively.
•    P/E of VN-Index and HNX-Index reached 18.8 and 14.23 respectively, equivalent to -10.5% Mom and -5.63% MoM. P/E of HNX-Index remained at 14th ranking, P/E of VN-Index remained at 5th in the region.
 

Market outlook
In short-term, the selling pressure still exists in some blue-chip stocks which have superior valuations from the market and from the portfolio restructuring of foreign investors. Thus, the market is still likely to have a negative territory around 1,000 points (Fibonacci 23.8% of the long cycle from 2012, also the week bottom of adjustment in February) in the first 1-2 weeks of May and will accumulatively recover in the second half of May. VN-Index mobilized in the range of 1,000-1,100 points in May. In next month, BSC gave two scenarios for the market as follows:
•  In positive case, the market goes back to testing threshold 1,115 points. After strong rallies, banks' stocks with strong improvement in profit will support the recovery of the index. The liquidity only remains at an average level, the index may gradually stabilize, creating a cumulative range at around 1,100.
•  In negative case, VN-Index will follow the V-D-V pattern after failing to overcome the resistance of 1,115 points and falling steeply below 1,000 points. Negative volatility from the world market, foreign selling is the factor affecting investor’s psychology and cash flow into the market.
 

Stock recommendation:
•  Industry sector and stocks were positively evaluated in the Industry Outlook 2018. 
•  Banking and financial stocks have improved dramatically and benefited from the Law on supporting restructuring of Credit Institutions and NPLs.
•  Real estate and construction stocks benefited from the recovery of economy.
•  Leading stocks in the retail sector have high growth and dividend yields.
•  Highly defensive stocks are in Consumption, Pharmaceuticals and Power industries.