Upload
duyle
View
1
Download
0
Embed Size (px)
DESCRIPTION
Monthly trading strategy for Feb 2015 of BVSC
Citation preview
1
MONTHLY STRATEGY REPORT
February 2015
12/3/2015
Research Department Bao Viet Securities JSC Hanoi Headquarter No 8 Le Thai To, Hoan Kiem Dist., Hanoi Tel: (84-4)-3928 8080 Fax: (84-4)-3928 9888
Email: [email protected] Website:www.bvsc.com.vn Ho Chi Minh City Branch 8/F, Bao Viet Tower, 233 Dong Khoi, Dist. 1. Tel: (84-8)-3914 6888 Fax: (84-8)-3914 7999
MACROECONOMY
The production sector was greatly affected in
February by the week-long Lunar New Year holiday.
The PMI still stood above 50 but the number of new
export orders declined.
Retal sales grew strongly in February thanks to rising
purchasing demand prior to Tet holiday, but
investment attraction and trade value dropped
sharply against the previous month. Private
investment surged in the first two months.
An expected increase of 7.5% in electricity price
beginning March 16 will surely affect the prices of
other items both in production and consumption
sectors.
STOCK MARKET
Bank stocks dominated the market.
Foreign investors increased net buying value for a
third consecutive month.
Performance of listed companies improved.
Foreign trading will influence the Vietnam stock
market in March.
Information about the signing of TPP agreement will
impact on related stocks and industries.
2
MACROECONOMY
Inflation MoM and YoY Price movement of some commodity groups
Industrial production index Total retail sales and services revenue (MoM)
FDI Trade balance
Interbank interest rates OMO by week
Sources: Bloomberg, GSO, BVSC
0
1
2
3
4
5
6
-0.5
-0.4
-0.3
-0.2
-0.1
0
0.1
0.2
0.3
0.4
0.5
3/1/2014 5/1/2014 7/1/2014 9/1/2014 11/1/2014 1/1/2015
%% CPI MoM (LHS) CPI YoY ( RHS)
-6.00%
-4.00%
-2.00%
0.00%
2.00%
4.00%
6.00%
8.00%
10.00%
12.00%
2/1/2013 6/1/2013 10/1/2013 2/1/2014 6/1/2014 10/1/2014 2/1/2015
Catering and related servicesBeverages and cigarettesApparel and footwareHousing and construction materialsOther goods and services
-25
-20
-15
-10
-5
0
5
10
15
20
Feb-14 Apr-14 Jun-14 Aug-14 Oct-14 Dec-14 Feb-15
%
MoM YoY
-2.30
2.002.40
1.401.70
0.300.10
0.70
1.60
3.002.60
2.20
3.70
-3.00
-2.00
-1.00
0.00
1.00
2.00
3.00
4.00
%
0
500
1000
1500
2000
2500
3000
3500
4000
Feb-14 Apr-14 Jun-14 Aug-14 Oct-14 Dec-14 Feb-15
Mil. USDFDI registered FDI disbursed
-1000
-500
0
500
1000
1500
2000
2500
3000
3500
0
2000
4000
6000
8000
10000
12000
14000
16000
Mil.USDMil.USDExport Import Trade balance in the last 12 months
0
1
2
3
4
5
6
7
12/26/2014 1/9/2015 1/23/2015 2/6/2015 2/20/2015
%
Overnight 1 week 2 weeks
5,995
13,282
73,123
2,039
-
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
26/1-30/1 2/2-6/2 9/2-13/2 24/2-27/2
Bil VND
3
The production sector was greatly affected in February by the week-long Lunar New Year holiday. The PMI still
stood above 50 but the number of new export orders declined.
Retal sales grew strongly in February thanks to rising purchasing demand prior to Tet holiday, but investment
attraction and trade value dropped sharply against the previous month. Private investment surged in the first two
months.
An expected increase of 7.5% in electricity price beginning March 16 will surely affect the prices of other items both
in production and consumption sectors.
Aggregate supply
Industrial production index
Sources: Bloomberg, GSO, BVSC
PMI statistics by HSBC
Sources: Bloomberg, BVSC
The index of industrial production (IIP) rose by 7% YoY in February but dropped
by 19.2% MoM (because there was a long holiday for Lunar New Year in February).
This phenomenon is normal every year when the MoM IIP is clearly affected by the
New Year holiday (the IIP fell by 21.3% MoM in February 2013 and 10.3% in
February 2014). It means that the IIP decline last month is not worrying. In the first
two months this year, the index rose by 12% YoY, much higher than the 5.4%
increase in the same period of 2014.
PMI rose slightly to 51.7 in February. Vietnam’s Purchasing Managers Index
(PMI) released by HSBC was recorded at 51.7 in February, higher than 51.5 in
January, which was a positive result if considering February as a holiday month.
According to HSBC, the number of new orders for enterprises increased for a sixth
consecutive month. However, the number of export orders fell for a second straight
month, following five consecutive months of growing. Production output in the
month rose more strongly than in January.
Based on two key indicators of the production sector, it can be seen that the
aggregate supply in February was significantly affected by the long New Year
holiday. If excluding this seasonal factor, the growth momentum of aggregate supply
was still maintained. A notable point was a decrease in the number of new export
orders over the past two months, partly reflecting weak demand from overseas
markets for Vietnamese export commodities. Although higher domestic consumption
demand helped offset the decline in foreign demand and boost production output,
this sign should be monitored to assess the export prospects of Vietnam in the
coming quarters.
Aggregate demand
Retail sales (MoM)
Sources: GSO, BVSC
Domestic consumption. Total retail sales and services revenue in February rose by
3.7% against the previous month, higher than the 2.2% increase in January, marking
a record high by month since December 2011. The growth of retail sales in the past
four months was positive (averaged at 2.88%/month), attributed to higher
consumption demand at the year-end and local people’s increased spending due to
low commodity prices.
In addition, revenue from tourism, staying and restaurant services surged 2% in
February given the trend of travelling during the Tet holiday. This trend is expected
to continue and grow in the coming years, making greater contribution to total retail
sales and service revenue during the Tet month.
-25
-20
-15
-10
-5
0
5
10
15
20
Feb-14 Apr-14 Jun-14 Aug-14 Oct-14 Dec-14 Feb-15
%
MoM YoY
5151.3
53.1
52.552.3
51.7
50.3
51.7
51
52.1
52.7
51.551.7
48
49
50
51
52
53
54
Feb-14 Apr-14 Jun-14 Aug-14 Oct-14 Dec-14 Feb-15
-2.30
2.002.40
1.401.70
0.300.10
0.70
1.60
3.002.60
2.20
3.70
-3.00
-2.00
-1.00
0.00
1.00
2.00
3.00
4.00
%
4
FDI
Sources: GSO, BVSC
Trade balance
Sources: Bloomberg, BVSC
Private investment. Total outstanding loans as at February 24 grew 0.96% against
December 2014. This fugure is surprising as credit growth is often negative in the
first months of the year. In Jan-Feb 2014, total outstanding loans were estimated to
fall by 1.16% against end-December 2013.
The State Bank of Vietnam (SBV) targets to obtain a credit growth of 13-15% in
2015 (which can be raised to 17% in favorable conditions), higher than 12-14% in
2014. The economic recovery will spur up companies’ borrowing demand to expand
production activities. In addition, interest rates are expected to remain low this year
(7-9% for short-term loans and 10-13% for mid- and long-term loans), being another
condition to support credit growth in the coming months.
Foreign direct investment. Vietnam attracted an estimated $529 million of foreign
direct investment in February, down 20% compared to the $663 million amount in
January. Meanwhile, FDI disbursement in the month was estimated to increase by
37.6% MoM to $695 million. In the first two months, registered FDI reached $1.19
billion, down 22.5% YoY while disbursed FDI hit $1.2 billion, up 7.1% YoY. The
manufacturing and processing industry still took the leading role, accounting for
80% of total registered FDI, followed by real estate business (9.3%) and other
industries 10.7%.
Although FDI disbursement figure is more significant to the economy, the decline in
registered FDI should be taken into account as it will likely affect the attraction of
new FDI in the future.
Trade surplus was estimated at $300 million in February. Vietnam’s export
turnovers were estimated at $9.6 billion in February, down 28% on-month (the
revised figure in Jan rose by $505 million against the estimated figure) but up 0.6%
on-year. Meanwhile, imports were estimated at $9.3 billion, a sharp decrease of
32.4% on-month and 7.8% on-year. The strong fall of import-export value in
February against January was caused by the long New Year holiday (making up
nearly one third of total working days).
In total, Vietnam recorded a trade surplus of $300 million in February, versus the
trade deficit of $361 million in January (revised from the estimated figure of $500
million). As a result, the country’s trade deficit was narrowed to $61 million in the
first two months of 2015. We expect that the trade balance would improve from
March when import demand decreases and exports rebound thanks to rising demand
from tranditional markets as the U.S., EU, Japan and South Korea.
In general, the constituents of aggregate demand in February 2015 reflect clearly the
impacts of the Lunar New Year holiday. Retail sales surged given soaring demand of
consumption for Tet, but investment attraction and import-export value fell sharply
compared to the previous month. On a positive note, private investment recorded
impressive growth, reflected in credit growth in the first two months of the year.
This is different from the recent years, suggesting higher growth in private
investment this year.
0
500
1000
1500
2000
2500
3000
3500
4000
Feb-14 Apr-14 Jun-14 Aug-14 Oct-14 Dec-14 Feb-15
Mil. USDFDI registered FDI disbursed
-1000
-500
0
500
1000
1500
2000
2500
3000
3500
0
2000
4000
6000
8000
10000
12000
14000
16000
Mil.USDMil.USDExport Import Trade balance in the last 12 months
5
Macro highlight in March
Inflation
Sources: Bloomberg, BVSC
An expected increase of 7.5% in electricity price will affect CPI. The consumer
price index fell by 0.05% on-month in February despite the peak shopping season
during the New Year festival. This was the fourth consecutive month that Vietnam
recorded on-month decrease in CPI, making the end-Feb CPI to rise by 0.34% on-
year, a record low in the history.
While the decrease in petroleum prices contributed to CPI fall in the previous
months, this influence will likely no longer exist in March. If the world oil price
continues to stand around $50/barrel while the stabilization fund declines, the
ministries of Industry and Trade and Finance are likely to soon decide to increase
retail gasoline prices (estimated to be raised by VND2,500/liter soon if the
stabilization fund is unused). In addition, electricity price is expected to be increased
by 7.5% from March 16, raising concerns among enterprises. In our calculation, in
this case, the electricity group would result in a 0.25% increase in CPI in the coming
months. This impact may be reflected with 0.1% in CPI in March and clearer in
April. The production price index PPI will also increse in line with electricity prices,
differently reflected in industries and enterprises but significantly in electricity-
consuming sectors as steel, cement, etc.
Banking system restructuring will be continued. So far, restructuring of the banking
system has ended its first phase, and banks have no more time to be merged or
restructured. In the view of BVSC, after the goal of merging 6-7 weak banks in 2014
failed, the SBV is likely to speed up this process in the first half of this year.
Restructuring will be more intensive in the coming months, with focus on
termination of cross ownership and improvement of banks’ financial capacity. Even,
the SBV will also directly treat weak banks as the Vietnam Bank for Construction
(VNBC) in late 2014. The mergence of small banks into large banks is a trend
helping to strengthen liquidity in the entire banking system in a sustainable way and
facilitate the application of new standards in financial governance and accounting as
well as supporting banks to expand scale. In the upcoming AGM season, large banks
as VCB, CTG and BID are expected to release their plans on M&A deals with small
banks.
0
1
2
3
4
5
6
-0.5
-0.4
-0.3
-0.2
-0.1
0
0.1
0.2
0.3
0.4
0.5
3/1/2014 5/1/2014 7/1/2014 9/1/2014 11/1/2014 1/1/2015
%% CPI MoM (LHS) CPI YoY ( RHS)
6
STOCK MARKET The gains/losses of some markets P/E Ratio
Trading Proportion by Industry on HSX Trading Proportion by Industry on HNX
Average Daily Trading Value Foreign Trading on HSX in Feb (mil USD)
Foreign Trading Value against Overall Market Vn30 and Hnx30 Trading Proportion
Sources: Bloomberg, HNX, HSX, BVSC
22.0%
6.6% 6.4%5.5%
3.1% 3.0% 2.9%1.9%
0.4% 0.2%0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
ASE Index
DAX Index
NKY Index
SPX Index
SHCOMP Index
JCI Index VNINDEX Index
KOSPI Index
SET Index
VHINDEX Index
February 2 months
0.0
10.0
20.0
30.0
40.0
50.0
60.0
VNINDEX
VHINDEX
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
40.0%
45.0%
11/28/2014 12/31/2014 1/30/2015 2/27/2015
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
40.0%
11/28/2014 12/31/2014 1/30/2015 2/27/2015
1,192,999
419,396
-
500,000
1,000,000
1,500,000
2,000,000
2,500,000
3,000,000
3,500,000
4,000,000
4,500,000
FebJanDecNovOctSepAugJulJunMayAprMar
Hsx Hnx
-500
-400
-300
-200
-100
0
100
200
300
400
500
T2T1T12T11T10T9T8T7T6T5T4T3T2
Foreign buy Foreign sell Different
18.0%
16.0%
12.0%10.8%
16.0%
17.5%
16.1%
11.4%
19.5%
16.1%
9.6%8.5%
12.7%
10.8%
18.8%
14.0%
10.0% 10.0%
13.0%12.0%
10.5% 10.8%11.7%
20.2%
17.6%
11.6%10.3%
12.6%
10.6%
13.2%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
T12 T1 T2 T3 T4 T5 T6 T7 T8 T9 T10 T11 T12 T1 T2
Buy Sell
49%47%
49%
43%
40%
45%
48%46%
48%48%47%
42%
61%
73%70%70%
65%66%
71%
66%
73%74%71%
66%
35%
40%
45%
50%
55%
60%
65%
70%
75%
80%
FebJanDecNovOctSepOctNovDecJanFebMar
% VN30 %VH30
7
Bank stocks dominated the market.
Foreign investors increased net buying value for a third consecutive month.
Performance of listed companies improved.
Foreign trading will influence the Vietnam stock market in March.
Information about the signing of TPP agreement will impact on related stocks and industries.
Bank stocks drived the market in February
Industries with big price fluctuations in Feb
Foreign net buying/selling value by industry on HSX in Feb
Industries’ revenue in 2014 vs 2013
The market recorded gains for a second straight month but liquidity tumbled.
Closing February 2015, the VnIndex and HnxIndex rose by 2.9% and 0.2%
respectively. Bank stocks contributed the most to the gain in February due to their
large capitalization and greater interest of investors, especially VCB, CTG, BID,
etc. Meanwhile, the drop in liquidity was caused by concerns about the impacts of
Circular 36 officially applied from February 01 and also the relaxing sentiment in
the Lunar New Year holiday month.
In general, there was little difference in the price fluctuations of stock groups in
February (according to ICB 2 industry classification on HSX). The insurance and
banking industries had the biggest gains (+5.79% and +5.46% respectively), mainly
driven by BVH, VCB, CTG and BID with strong foreign buying. Meanwhile, the
medical equipment and service industry suffered the biggest loss (-5.35%), mostly
due to heavy profit-taking in the industry’s leading stock JVC after its overheated
gains. The steel industry also underwent a negative trading month (down 3.7%),
mostly affected by information about electricity price increase and competition
pressure from imported steel amid difficulties facing the export sector given rising
exchange rate and tariff barriers from neighboring countries.
Foreign investors increased net buying value for a third straight month
Foreign investors boosted buying in February while selling value was low. Their
net buying value reached VND1,073 billion in the month, the biggest value since
June 2014. This foreign move contributed largely to the rally of the two indices
amid weak buying demand of domestic investors.
Foreigners bought strongly finance and real estate stocks while sold healthcare
stocks with a small value. CTG, VCB, BID and BVH were net purchased at a high
value, leading to their big gains in February, while KDC, CSM and HPG were
dumped.
Performance of listed companies improved
FY2014 operating results of listed companies on the two exchanges improved
much compared to 2013. Temporary statistics on FY2014 business results of 568
listed companies showed that 46 firms reported losses (versus 64 firms in 2013).
The combined revenue of the 568 companies rose by 12.05% yoy while the
combined profit was up 12.23% yoy. Their net profit margin was 8.08%, higher
than 8.06% in 2013. Total inventory value increased by 4%, showing the expansion
of the production sector given the enterprises’ increased confidence in the economic
recovery. In conclusion, the operating results of listed companies in 2014 recorded
5 best performers (ICB) % Change Key members
Nonlife Insurance 5.79% BVH, PVI, VNR, BMI, BIC…
Banks 5.46% VCB, CTG, BID, STB, EIB…
Software & Computer Services 5.44% ELC, CMG, SGT, CMT, SRB…
Household Goods & Home Construction 5.40% DQC, EVE, TTF, LIX, RAL…
Personal Goods 4.80% TCM, GMC, KMR, KHA, TNG…
5 worst performers (ICB) % Change Key members
Electricity -1.60% PPC, VSH, TMP, CHP, TBC…
Automobiles & Parts -1.72% DRC, CSM, SRC
Travel & Leisure -1.90% VNS, TCT, RIC, DSN, GTT…
Industrial Metals & Mining -3.70% HSG, POM, TLH, DTL, VIS…
Health Care Equipment & Services -5.35% JVC, DCL, DNM
(10 0,000,000)
-
100,000,000
200,000,000
300,000,000
400,000,000
500,000,000
600,000,000
700,000,000
-
50
100
150
200
250
300
2013 2014
8
Industries’ profit in 2014 vs 2013
Inventory in 2014 vs 2013
Net profit margin in 2014 vs 2013
significant growth compared to 2013, especially in the second half of the year. This
growth was attributed to the economic stability, low interest rates, decreased oil
prices (leading to lower corporate expense) and improved domestic consumption
demand.
Industrial, consumer services and oil-gas groups recorded impressive profit
growth of 123%, 29% and 15% yoy respectively. The profit growth of industrial
companies was contributed evenly by all companies in this group but especially by
leading stocks as HPG, GMD, CII, HT1, etc., and some firms that converted loss
into profit after one year such as BCC and PVX. This result was not only attributed
to the improvement in their core business results but also to objective factors as oil
price decrease (leading to lower operating expenses) or the reversal of exchange
rate provision (in cases of HT1, BCC). Meanwhile, the profit growth of consumer
service companies, typically VNS, PNJ, was due to improved consumption demand
and the economic recovery. For oil-gas companies, including GAS, PVS, PLC,
their FY2014 profit remained solid due to little influence from the world oil price
decrease.
On the contrary, basic materials and real estate groups suffered the biggest profit
decline of 31.2% and 29.9% respectively. Unfavorable input and output price
movements led to the profit plunge of basic material firms, easily seen at natural
rubber and fertilizer companies as DPR, PHR, DPM. Meanwhile, the profit of the
real estate industry tumbled due to no huge financial income of VIC recorded as in
2013. However, the majority of the other realty companies showed high growth in
revenue and profit as well as high clearance of inventories given the warming of the
real estate market.
Factors to affect stock market in March
Foreign trading and VNINDEX movements in the past
Foreign trading will influence the Vietnam stock market in March. Domestic
investors are pinning high expectations that foreign investors would steadily
purchase leading blue chips with high value, particularly financial stocks. Strong
buying demand from foreign investors was the main contributor to the market rally
in February when domestic traders reduced trading on concerns about the negative
impacts of Circular 36. In the past, a plenty of upside wave was created and
contributed by foreign money flows. Most recently, there were two phases with
strong net foreign buying, from September 2013 to February 2014 and from April
to June 2014, leading to the bull run of the VnIndex lasting from end-2013 to April
2014 and from May to September 2014. Given that the Japanese and EU economies
are still facing many difficulties and the two central banks (ECB and BoJ) will
likely continue to maintain loosened monetary policies this year, while the FED is
unlikely to raise base interest rates in the first two quarters of 2015 under the
forecast of world economic organizations, BVSC expects that money will continue
flowing into emerging markets to get higher profits, thereby giving benefits to the
Vietnam stock market in March.
The portfolio review of two ETFs will influence the movements of related blue
chips. According to BVSC’s Q1 2015 ETFs bulletin, VNM exchange-traded fund is
likely to remove DRC from its basket due to failing to meet criteria in liquidity and
capitalization. No new stocks are eligible to be added. Some stocks as VIC, VCB,
0
5
10
15
20
25
30
2013 2014
05
1015202530354045
2013 2014
0%
5%
10%
15%
20%
25%
2013 2014
-100
-50
0
50
100
150
200
250
300
350
400
450
500
550
600
650
700
1/2
/20
13
1/2
4/2
01
3
2/2
2/2
01
33
/18
/20
13
4/9
/20
13
5/7
/20
13
5/2
9/2
01
36
/20
/20
13
7/1
2/2
01
38
/5/2
01
38
/27
/20
13
9/1
9/2
01
31
0/1
1/2
01
3
11
/4/2
01
31
1/2
6/2
01
31
2/1
8/2
01
3
1/1
0/2
01
42
/12
/20
14
3/6
/20
14
3/2
8/2
01
44
/22
/20
14
5/1
9/2
01
4
6/1
0/2
01
47
/2/2
01
47
/24
/20
14
8/1
5/2
01
49
/10
/20
14
10
/2/2
01
4
10
/24
/20
14
11
/17
/20
14
12
/9/2
01
41
2/3
1/2
01
41
/26
/20
15
2/2
5/2
01
5
Foreign net buy VNINDEX
9
MSN and STB are likely to be sold because their weight exceeds the ceiling. For
DB x-trackers FTSE Vietnam UCITS ETF, several stocks namely OGC, HSG and
CSM are expected to be removed out of its basket due to failing to meet criteria in
liquidity and capitalization. MSN and VIC may be sold heavily due to exceeding
the ceiling weight. In general, such periodic trading of the two ETFs will not have
large impact on the overall market as their moves are always within the expectation
of investors. According to our observations in the previous reviews, the stocks that
were eliminated from the ETFs’ baskets offered opportunities for short-term buying
in the second and third week of the end-quarter month.
In addition, information relating to Q1 2015 corporate earnings and the
upcoming AGM season will result in a segmentation in the market. In particular,
stocks related to M&A, issuance and capital raising plans or loss clearance will
attract the great attention of investors. Firms that could clear accumulated losses
will likely benefit rising cash flows after being removed from the black list of
margin loan restriction.
Investment viewpoint
Information concerning to the TPP agreement signing will impact on related
stocks and industries. The Trans-Pacific Partnership Free-Trade Agreement (TPP)
negotiations are expected to be completed in 2015. If the agreement is officially
signed, it will bring great benefits to many industries and boost revenue and profit
growth, especially for export-related industries such as textiles, agro-forestry-
aquaculture, etc. When completed, TPP will help connect the free trade area with
800 million people, accounting for 30% of global trade and nearly 40% of the
world output. However, in the view of BVSC, the stock prices of these industries
have risen sharply in the recent period; although they remain attractive in the long
term but tipped to have moderate growth in 2015. Instead, investors can consider
companies that indirectly benefit from the free trade agreements such as auxiliary
industries, transport, seaport, etc., whose growth prospects are not yet reflected
much on stock prices.
10
.
DISCLAIMER
This Report of BVSC is to provide monthly general information and analysis on the Vietnam Stock Market. The report is not done by
requirement of any institution or individual. Investors should use the information, analysis, and commentary in the report as a reference
source before making investment decisions. The report is for informational purposes and is not intended to advise readers to buy or sell any
securities.
The information contained in this report has been verified carefully; however, BVSC takes no responsibility with regard to the accuracy or
completeness of any information contained herein. Viewpoints and analyses in the report can be changed without notification.
This report is the property of BVSC and under copyright protection. Any copy, change, and/or reprint of the report without the permission of BVS
is illegal. BVSC owns the copyright on the report.
RESEARCH & INVESTMENT ADVISORY DEPARTMENT
Bao Viet Securities Joint Stock Company
Head office: 8 Le Thai To. Hoan Kiem Dist., Hanoi Branch: F8 Bao Viet Tower, 233 Dong Khoi, Dist. 1, HCM City
Tel: (844) 3928 8080 Fax: (844) 3928 9888 Tel: (848) 39146888 Fax: (848) 39147999
Economist:
Yen Tran [email protected]
Supervisor:
Nam Nguyen, Ph.D. [email protected]
Binh Nguyen MA [email protected]
Market Strategist:
Lưu Anh Tran [email protected]
11