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Vietnam Daily Market Recap Nov 16

Daily Market Recap 16/11/2020    443


Dear Valued Clients,

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

Market Commentary: The VN-INDEX recorded the biggest fall in nearly two weeks with 15.5pts decline

The VN-INDEX dropped 1.6% from Friday’s 1-month peak as Real Estates and Consumer Staples’ large caps fell under strong selling. After the opening bell, the VN-INDEX kicked-off the morning session in the green and quickly rose to its intraday high of 973.0pts (+0.7%). Top movers today included HPG (+0.9%), KOS (+6.7%), HNG (+1.4%), PAN (+3.1%), and NKG (+7.0%). However, selling pressure emerged and kept the index to stay in the red territory for the rest of the session. VIC and VHM were the largest laggards, falling 5.0% and 2.2%, respectively, and together taking a combined of 6.6pts off from the index. Large caps from Consumer Staples and Financials sectors also declined, including MSN (-6.9%), SAB (-1.7%), VCB (-1.3%), and BID (-1.0%). As a result, the VN-INDEX plunged 1.6% to close at its intraday low of 951.0pts, and the HNX-INDEX also fell 0.9% to end at 143.4pts.

Only Materials (+0.5%) rose, while Real Estate (-3.0%), Consumer Staples (-1.9%), and Energy (-1.3%) lost ground today. Top index movers included HPG (+0.9%), KOS (+6.7%), HNG (+1.4%), PAN (+3.1%), and NKG (+7.0%). Top index laggards consisted of VIC (-5.0%), MSN (-6.9%), VHM (-2.2%), VCB (-1.3%), and SAB (-1.7%). Top three major put-through transactions were MSN with 1.6m shares (VND139.7bn), DIG with 3.7m shares (VND76.7bn), and HAG with 15m shares (VND68.3bn).

Foreigners net sold on HOSE to the amount of VND415.4bn, and also net sold on HNX to the amount of VND3.6bn. They mainly bought VNM (VND103.3bn), VRE (VND91.4bn), and MBB (VND71.5bn); and mainly sold CTG (VND128.1bn), VHM (VND123.0bn), and MSN (VND109.6bn).

Market News

Oil rose in New York on optimism over China’s recovery from a virus-led demand crash and with the U.S. set to avoid a national lockdown to curb the spread of Covid-19.

The robust recovery in Asia is supporting the oil market just as the U.S. and Europe face a downturn due to a resurgent virus. Brent’s nearest time spread — a gauge of market health –reached its strongest since mid-July on Monday, the latest sign that the recovery East of the Suez Canal is offsetting weakness in the West. Oil capped its biggest weekly advance since early October on Friday after news of a breakthrough on a Covid-19 vaccine. Though Europe’s demand is wavering as lockdowns re-emerge, the U.S. said it will target local measures rather than a nationwide lockdown to tackle the spread of the virus. An OPEC+ committee will assess the health of the market on Tuesday, before a decision at the end of the month where a delay to an output hike is expected. (Bloomberg)

New decree to prevent transfer pricing, limit thin capitalisation in Vietnam

The Government’s recently-issued Decree 132/2020/NĐ-CP would help prevent transfer pricing and limit thin capitalisation to develop a healthy investment market, Deputy Director of the General Department of Taxation Dang Ngoc Minh said. Minh spoke at a press conference on Monday to introduce new points of the decree dated November 5 about tax management for enterprises with related-party transactions, saying the interest expense deduction limit was raised from 20% to 30% – the highest ratio recommended by the Organisation for Economic Cooperation and Development. Increasing the cap to 30% would help enterprises have more capital for investment in the context that most firms in Vietnam were thinly-capitalised with the level of debt much greater than equity capital, he said. Minh said that the Decree 132 did not differentiate foreign-invested companies and domestic companies in fighting transfer pricing to ensure fairness and transparency. According to Nguyen Thu Huong from international non-governmental organisation Oxfam in Vietnam, it was necessary to terminate corporate income tax (CIT) incentives and reductions to minimise transfer pricing. The preferential value was estimated at about 7% of the total CIT revenue annually, a considerable sum, Huong said. However, she pointed that there was an unfairness because the preferential tax mostly applied to FDI companies. Preferential CIT policies to encourage investment led to a race to the bottom among localities in the country and among countries in the region, which was not only causing losses to budget revenue but also creating loopholes for transfer pricing, Huong said. Deputy Director of the finance ministry’s Department of State Budget Nguyen Minh Tan said that transfer pricing often occurred when there were tax incentives. However, tax incentives were an important factor to attract foreign investment in the context of a global production shift triggered by the COVID-19 pandemic, Tan said. Vietnam was regarded as an attractive destination for investment but not the only choice, Tan said, adding that it was necessary at the same time to offer tax incentives to attract investment and to fight transfer pricing. Decree 132 implemented regulations which were appropriate to international practices and the condition of Vietnam to enhance the prevention against transfer pricing, Tan stressed. (

Notable Corporate Events

Airports Corporation Of Vietnam (ACV VN, UPCOM) – Business activities: ACV has announced the completion of procedures and plans to construct the Long Thanh airport project in Dec 2020, the company’s chairman said. The project includes 3 sub-projects with a total investment of VND99,000bn using the company’s capital. (

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