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Vietnam Daily Market Recap Nov 13 – KBC

Daily Market Recap 13/11/2020    297


Dear Valued Clients,

We would like to send you our Daily Market Recap for today

Market Commentary: The VN-INDEX closed at the 1-month peak

The VN-INDEX gained another 7.0pts, the highest level since 21st October 2020, on the back of large support from Real Estate and Financial large caps. Vietnam’s main index opened the session optimistically with almost large cap’s advances. Market pillars from Real Estate had an impressive performance with VHM (+1.4%) and VIC (+0.6%), together adding 1.6pts to the index. The rally was also contributed by Financial large caps, including CTG (+3.1%), BID (+1.8%), and TCB (+3.1%). On the other hand, top laggards included MSN (-3.2%), HNG (-2.3%), BCM (-0.5%), and DHG (-1.4%). However, their selling pressure was minor compared to today’s overall gain. Thus, the VN-INDEX stayed positive, rising 0.7% to close at its intraday high of 966.3pts. The HNX-INDEX also enjoyed a 0.1% rise to land at 144.7pts.

Financials (+1.6%), Materials (+1.0%), and Real Estate (+0.7%) rose, while Consumer Staples (-0.2%) and Health Care (-0.2%) lost ground today. Top index movers included VHM (+1.4%), CTG (+3.1%), BID (+1.8%), TCB (+3.1%), and VIC (+0.6%). Top index laggards consisted of MSN (-3.2%), HNG (-2.3%), BCM (-0.5%), DHG (-1.4%), and SVC (-6.3%). Top three major put-through transactions were VJC with 2.5m shares (VND265.9bn), HAG with 20m shares (VND91bn), and VNM with 0.5m shares (VND53.4bn).

Foreigners net bought on HOSE to the amount of VND216.3bn, while net sold on HNX to the amount of VND6.7bn. They mainly bought VJC (VND266.8bn), VHM (VND86.5bn), and VNM (VND67.8bn); and mainly sold VNM (VND111.3bn), CTG (VND110.3bn), and HDB (VND62.5bn).

Market News

Oil drops after jump in U.S. stockpiles and gloomy IEA forecast

Oil fell for a second day – dropping below US$41/barrel in New York – after a surprise jump in U.S. crude stockpiles and a gloomy forecast from the International Energy Agency weighed on the demand outlook. American crude inventories rose by 4.28 million barrels, climbing for a second week in three, according to data from the Energy Information Administration on Thursday. The IEA cut its global oil demand projections for this quarter by 1.2 million barrels a day in its latest monthly report. Oil is still up about 9% this week, however, after news of a potential Covid-19 vaccine breakthrough spurred a sharp jump in prices on Monday. The market has also been supported by indications that the OPEC+ alliance is closing in on a deal to delay a planned easing of output cuts. (Bloomberg)

RCEP – A new boost for Vietnam’s enterprises

The Regional Comprehensive Economic Partnership (RCEP) agreement, expected to be signed on November 15 within the framework of the 37th ASEAN Summit in Hanoi, will be the world’s largest free trade agreement (FTA) and is a significant boost for ASEAN businesses, including those in Vietnam, according to insiders. According to Director of the Ministry of Industry and Trade’s Multilateral Trade Policy Department Luong Hoang Thai with provisions to reduce or remove tariffs on industrial and agricultural products, the RCEP will help firms in ASEAN member states boost exports, particularly to major trade partners. He suggested Vietnamese companies improve their competitive edge by paying due regard to trade policies, renewing technologies, and landing large investments in services. Meanwhile, Deputy Director of the ministry’s Asia-Africa Market Department Nguyen Phuc Nam recommended local companies ensure rules of origin on goods and certificates of origin procedures, so as to gain full access to tariff preferences. “Enterprises must understand regulations on standards and quality, upgrade production, and invest in packaging,” he said. They should also handle any issues that arise and inform relevant authorities of such, to receive timely consultation and support. He urged them to remain abreast of consumer trends, engage more in trade promotion activities, and seek prestigious distributors. Minister of Industry and Trade Tran Tuan Anh said that once the RCEP takes effect, Vietnamese companies will have more opportunities to expand markets, join regional value chains, and attract more foreign investment. Telecommunications, IT, garments and textiles, footwear, and agriculture can take huge advantage of import tariff reductions under the agreement, he stressed. (

Coverage Universe Update

Kinh Bac City Corp (KBC) – Update – HOLD (+9.4%)

Expect better performance in 4Q20F

KBC’s 9M20 net profit hits 7-year low

Kinh Bac City Corp (KBC) reported a 9M20 net revenue of VND930bn (-63% yoy), due to a sharp decrease in IP leased land revenue (-76% yoy) to VND520bn as well as the absence of factory and warehouse sales. In 9M20, KBC leased 19ha of IP land (-82% yoy), mainly from Tan Phu Trung IP (16.8ha, -36% yoy) and Quang Chau IP (2.2ha, -97% yoy). Revenue from residential properties in 9M20 was VND122bn vs. a small contribution in 9M19 (VND1.7bn). Overall, weaker-than-expected 9M20 revenue dragged down net profit by 94% yoy to VND30bn, forming only 4.9% of our full-year forecast.

We expect strong earnings in 4Q20F

In Oct 20, the government approved the zoning adjustment at Nam Son Hap Linh IP. Thus, we expect NSHL Phase 1 (100ha) to be ready to handover land to registered investors in 4Q20F. In the best case, KBC can record VND1,379bn in revenue from NSHL IP (66ha in total NLA) in 4Q20F. Coupled with the delivery of shop houses and villas from Trang Due Urban Area in end-4Q20F, we expect the 4Q20F results to be strong.

Lower FY20F EPS to reflect weaker-than-expected sales

We reduce our FY20F revenue forecast by 35.5% to VND2,800bn (-12.8% yoy) due to the weaker-than-expected sales in 9M20. We project KBC to report a net profit of VND616bn in FY20F (-33.0% yoy), down 41.5% from our previous forecast, implying core EPS growth of -33.0% yoy. However, we raise our FY21F core EPS by 4.0% to reflect the strong rental growth in Tan Phu Trung IP in FY20-21F.

Downgrade from Add to Hold with a lower TP of VND15,700

We downgrade from Add to Hold and cut our RNAV-based TP to VND15,700 to reflect weaker-than-expected sales in 9M20 and delays in booking revenue from the Phuc Ninh project. Potential near-term upside risks could come from faster IP or residential land sales; our mid- to long-term investment thesis is dependent on whether KBC can clear legal hurdles for the start of Trang Cat project and receive approval for Trang Due 3 IP in FY21- 22F. Key downside risks to our call: 1) worse-than-expected IP land sales; 2) delays in the delivery of NSHL Phase 1; and 3) delays in booking revenue from residential projects.

Read the full report: HERE

Notable Corporate Events

Phu Nhuan Jewelry JSC (PNJ VN, HOSE) – Dividend payment: PNJ has set 09 Dec to be the record date for paying the first 2020 cash dividend of VND600/share. The payment will be made on 22 Dec. (

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