Macro&Market August 2019__Before the Trade War Storm_20190905

Macroeconomics
• PMI index decreased from 52.6 in July to 51.4 points in August, lower than the 2018’s average of 53.7 points.
• Total estimated retail sales of consumer goods and services in 8M2019 reached VND 3,215 trillion, up 11.5% compared to the same period last year, if excluding the price factor, it increased by 9.03%.
• In 8M2019, registered FDI decreased by 31.2% over the same period last year while disbursed FDI increased by 6.3% compared to last year. FDI capital mainly focused on processing and manufacturing sector.
• The interbank USD/VND exchange rate fluctuated between 23,260 and 23,330 USD/VND, moving sideways compared to the amplitude in July. Interbank interest rates increased in the last week of August, especially short and mid term interest rates period.

Stock market
• VN-Index officially decreased by -7.6 points compared to the end of last month (-0.77% MoM), (+ 8.06% YtD) and HNX-Index decreased -2.11 points (-2.02% MoM), (-0.54% YtD).
• Average liquidity on both exchanges increased by 12.9% compared to July 2019, and increased to VND 4,777 billion/session and equivalent to nearly USD 205 million/session.
• In August, foreign investors net sold on the HSX VND -1,706 billion, net sold VND -221 billion on the HNX.
• VN-Index P/E dropped to 16.69, equivalent to -0.43% MoM, +8.84% YtD and HNX-Index fell to 7.37, equivalent to -1.44% MoM, -13.04% YtD. Compared to July 2019, the P/E of the VN-Index remains at the 10th position and the HNX-Index continues to hold the 20th position in Asia.

Market outlook in September
The market will have movements to welcome the third quarter business results in the second half of September, but this is not yet a breakthrough when the negative information from the world is still ahead. The VN-Index price fluctuation in September continued to range from 965 points to 1,015 points. In September, BSC proposed 2 scenarios as follows:
• In the positive case, VN-Index will keep above 965 points at correction span, with the central price zone of 980 points. Price movements welcomed the third quarter business results, improved liquidity in some sectors and stocks with good growth prospects.
• In the negative case, VN-Index may drop below 950 points if there are adverse information from the world and foreign investors net sell.
 

Recommended stocks:
• Industry and stocks are evaluated positively in the Sector Outlook Report 2019 (Link) and Quarter 2 Sector Outlook (Link);
• Stocks with improvement and positive outlook such as Banking, Retail, leading stocks;
• Stocks benefited from recovering NVL prices and oil prices;
• Defensive stocks such as Electricity, Information Technology - Post, Retail consumption have high growth and dividends;
• In the long-term, BSC's recommended stocks will be mentioned in the sector strategic reports for the third quarter, stocks with good changes are recommended in the Weekly Report (Link), and update report for Sector/Company (link).