Daily Market Recap May 22, 2024

Bank stocks lead market retreat after month-long rally

The VN-Index popped higher at the open on Wednesday by as much as 0.5% but sellers quickly stepped in to send the index downward the rest of the trading session to close down 0.8%, or 10.23 points, to 1,266.91. Before today’s drop, the index had gained 8.8% since April 19. The HNX Index was in the green today with a 0.8% increase to 245.15.

Bank stocks tumbled 1.3% today after the SBV raised OMO rates by 0.25% pts to 4.5%. This comes after the SBV has recently injected nearly VND25tn (USD1bn) into the system, highlighting concerns about a potential liquidity squeeze. The SBV’s recent actions appear contradictory as it has also been selling USD to curb exchange rate pressure via withdrawing VND from the system while simultaneously injecting VND and increasing OMO rates. In other words, while both policies aim to control the exchange rate, they seem to have conflicting effects on bank liquidity. Overall, banking stocks saw selling pressure upon growing fears of increasing mobilization costs today following the increase in OMO rates. Nearly every stock in the sector fell. VPB (-2.7%), CTG (-1.9%) and VIB (-1.8%) were among the top decliners while LPB (+2.0%) stood out as the lone gainer following the news we reported yesterday regarding its upcoming share issuance and the impact this could have to partially remove pressure on the bank to increase deposit rates.

Besides banks, other lagging sectors included basic resources (-1.4%), and insurance (-1.2%), led by HPG (-1.7%), and BVH (-1.1%).
FPT (+1.5%) stood out as one of today’s top performers as investors expect FPT’s business results to continue to grow in the near future and further possible cooperation between the country’s technology corporations and NVIDIA.

BSR (+9.1%) had an impressive session today, buoyed by expectations of business growth, particularly its plans to move to HOSE and advance its project to upgrade and expand the Dung Quat Oil Refinery.

NLG (+2.3%) gained thanks to news that NLG was expected to sell 8.9 hectares of land at the Waterpoint Southgate project (near the Aquaria subdivision) to Aeon Mall. This sale is expected to enhance the quality of the ecosystem in the urban area as well as attract residents. It is projected to bring in revenue of USD50-60mn for NLG in 2Q24. Other stocks in the residential property sector also saw positive movements today, including DXG (+1.5%), VHM (+0.4%), and KDH (+0.3%).

Foreign investors had their fourth consecutive net selling session today with a net trading value of VND857bn (USD34mn), focusing on ABB (VND883bn, USD35mn), VHM (VND128bn, USD5.0mn) and VIC (VND114bn, USD4.5mn). On the contrary, NLG (VND62bn, USD2.4mn), HCM (VND49bn, USD1.9mn) and DBC (VND41bn, USD1.6mn) were mainly bought.

Other top performers today included HVN (+3.0%), LPB (+2.0%), PDR (+3.9%) and MWG (+0.8%). Conversely, top laggards included VPB (-2.7%), VIC (-2.1%), CTG (-1.9%), HPG (-1.7%), and TCB (-1.7%).

Read the full report: HERE