Vietnam Daily Market Recap Apr 19, 2024 – SSI initiation; SCS, SZC and VFS US earning flashes; LPB and MBB AMG’s notes, Bond market report

Market commentary: Oil prices, exchange rate weigh on market sentiment

The VN-Index fell 1.52% (-18.16 points) with trading volume reaching more than VND22,500bn (US$937.5bn). The HNX-Index lost 5.4 points (-2.39%), with its trading value reaching more than VND2,600bn (US$108mn).

For the week, the market slumped amid a volatile macro environment. The VN-Index decreased 101.75 points (-7.79%) in just four trading days this week, the biggest weekly decline since May 2022 and wiping out all of the market’s gains of February and March, as the market broke below the psychological level of 1,200. Market liquidity decreased by 15% this week from last week.

The index was also impacted by the trend of US stocks, as the Dow Jones Index is falling for a second week after hitting its all-time peak in March 2024, after data showed inflation in the US persists, reinforcing the Fed’s cautious attitude in cutting interest rates. The 10-year US government bond yield reached its highest level in the past five months and is nearly equivalent to 2007 levels.

Brent oil prices decreased this week to US$87.62/barrel, down from last week’s peak (US$90.3/barrel) but still near the highest level in six months. Concerns about interest rates and geopolitical tensions, the US re-imposition of sanctions on the Venezuelan and Iranian oil and gas industries is an important factor causing oil prices to rise. However, oil and gas stocks PVS (-10.7%), PVD (-10.67%), PVT (-6.2%), GAS (-5.90%) fell sharply this week, brought down by overall local market sentiment.

Since March 11 through today, the SBV has net withdrawn VND33,587bn through T-bills, bidding an interest rate of 3.73% today (vs 3.5% last week). T-bills have matured, causing the SBV to net inject VND79,463bn this week (vs VND51,283bn last week). The overnight interbank rate was 4% today (vs 3.5% last week), however the VND continues to weaken (-4.8% ytd). We believe that this T-bill issuance is an exploratory move by the SBV given that the issuance volume is not as large as in 2023 (the highest net absorption value is only VND171,000bn vs VND254,000bn in 2023). T-bill issuance is also the SVB’s fastest and simplest solution to manage currency policy.

Financial services (-11.7%) were the largest loser this week, led by SSI (-11.6%), VND (-13.9%), HCM (-15.8%) and VIX (-16.4%). Banks (-4.7%) lost 32.46 points over the week, with BID (-9.5%) the largest market laggard, along with VIB (-7.9%), TCB (-6.1%), ACB (-5.0%) and MBB (-7.9%)

Export recovery in recent weeks was almost reflected in the prices of exporting enterprises from the end of March. On a positive note, TCM jumped to its ceiling during late ATC trading, after recording significantly improved business results in February. Revenue reached US$10.9mn (+98.3% yoy), net profit rose to US$667,000 (+118% yoy) in February. For 2M24, revenue reached US$25.2mn (+120% yoy, 16% of guidance), and net profit was US$1,652mn (+140 yoy, 24.7% of guidance). Regarding the order book, the company reached 86% of its 2Q24 order plan thanks to a recovery of demand in export markets.

Read the full report: HERE