Weekly Market Roundup (February 10, 2020)

Yuanta Vietnam Weekly Market Round-Up — Feb 10, 2020

Introducing the Yuanta Vietnam weekly market wrap, a short summary of the prior week’s market action that we will endeavor to publish on Monday mornings. This effort is based on client suggestions and is very much a work-in-progress; any feedback on how we can improve it would be more than welcome.

Weekly Index Performance

• VNINDEX: 941 (+0.4% WoW / -2.1% YTD / +1.4% YoY)
• HNINDEX: 105 (+2.5% WoW / +2.4% MoM / +1.5% YoY)
• UPCOM Index: 56 (+1.1% WoW / -1.4% MoM / +1.7% YoY)
• Average daily turnover: US$180 mn (-7% WoW)
• Foreign investors net sold $27 million of HOSE-listed stocks.

VND: 23,200 to the USD (-6bps WoW)

The week ending Feb 7 saw increased volatility along with the region on a surge in uncertainty related to the coronavirus outbreak. The VNI plunged along with Asia on Monday Feb 3 to reach an intraday / YTD low of 892 (down 10% from the pre-holiday close of Jan 22). But VNI then recovered to close the week at 941, flat WoW and up 5% from its intraday panic low of last Monday.

Banks led the market higher on solid performance from several heavyweight names including VPB (BUY, +12.9% WoW), STB (BUY, +9.3%), and HDB (HOLD-Underperform, +10.9% WoW). Analyst Tanh Tran remains bullish on the banks after updating our CAMEL analytical framework for 4Q19 preliminary results in a note published last week (see Page 2 of this note for links to our recently published research).

Oil & Gas sector under pressure. O&G shares are highly correlated with oil prices, and thus have been under substantial pressure despite solid 4Q19 financial performance. Analyst Binh Truong remains bullish on the sector but acknowledges that the risks have risen. Unlike stock prices, E&P operations do not fluctuate based on day-to-day oil price volatility. History indicates that operations could be curtailed if oil remains below USD60/barrel for longer than three months.

The coronavirus outbreak remains the key story of the Year of the Rat so far. So far the virus is not known to be widespread, as the authorities reported Vietnam’s 14^th case on Sunday, Feb 9. But the economic implications may be more substantial given the impact on global manufacturing and, potentially, domestic consumption.