Vietnam Daily Market Recap Nov 25

Dear Valued Clients,

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

Market Commentary: The VN-INDEX closed in green but below 1,000pts

The VN-INDEX gained 0.4% to close at the highest level in nearly 52 weeks backed by support from Financials and Consumer Staples stocks. Following the Dow Jones Industrial Average’s strong increase yesterday of 1.5%, Vietnam’s main stock index opened with a positive sentiment. VNINDEX soon reached its intraday high of 1,002.3pts (+0.6%), lifted by Financials and Consumer Staples large caps. Specifically, blue chips from these sectors contributed 3.6pts to the index’s gain, led by VCB (+1.2%), VPB (+4.1%), BID (+1.5%), SAB (+1.6%) and VNM (+0.8%). Large caps from other sectors also joined the rally, including VIC (+1.5%) and GVR (+3.3%). On the other hand, HPG became today’s top laggard, losing 5.1% to close at VND35,600. However, other market pillars’ advance surpassed the bearish large cap. As a result, the VN-INDEX gained 4.2pts (+0.4%) to close at 999.9pts. The HNX-INDEX also gained 0.5pts (+0.4%) to end up at 148.1pts.

Health Care (+1.5%), Financials (+0.9%), and Consumer Staples (+0.9%) rose, while Materials (-3.0%) and IT (-0.5%) lost ground today. Top index movers included VIC (+1.5%), VCB (+1.2%), VPB (+4.1%), BID (+1.5%), and GVR (+3.3%). Top index laggards consisted of HPG (-5.1%), VHM (-0.4%), PDR (-3.1%), VGC (-3.7%), and BVH (-1.1%).

Market News

Oil keeps rising after eight-month high on demand optimism

Oil kept rising after closing at an eight-month high on increasing optimism that recent Covid-19 vaccine breakthroughs will lead to a swift recovery in global energy demand next year. Futures in New York climbed around 1% to trade above US$45/barrel as a broader financial markets rally continued. Global benchmark Brent crude could reach US$60/barrel by the summer of 2021 as the easing of travel restrictions boosts demand for fossil fuels, according to Bank of America Corp. (Bloomberg)

Vietnam’s aviation industry awaits new bigger bailouts

Private airlines including Vietjet Air and Bamboo Airways struggling to survive are looking forward to a new support package to maintain their operations. After taking measures to restructure, Vietjet incurred a consolidated loss of nearly VND1tr. If counting the loss of the aviation division only, the figure would be trillions of dong. Bamboo Airways’s loss from COVID-19 is about VND1tr. International flights, which bring 50% of Vietnam Airlines and Vietjet revenue, remain closed. Meanwhile, domestic flight demand is decreasing in the low season. The cash flow exhaustion has forced airlines to lower airfares, which has also affected their sources of revenue. Though airlines have tried every possible way to save themselves, they still need a support package from the state to improve cash flow, and other policies on preferences in taxes and fees. Vietnam Airlines, the national flag air carrier, which the state holds 86% of capital, got the National Assembly’s nod on a bailout worth VND12tr. A VND11tr bailout for the government-guaranteed loans for three airlines has also been suggested by MPI in order to help improve the cash flow and liquidity of aviation enterprises, and avoid the worst scenario: airlines have to declare bankruptcy, which will damage the whole structure and completion of the aviation industry. In the circular on the price frame applied to some types of services at airports, the ministry agreed on the application of the minimum price level of zero dong for eight types of aviation services and three non-aviation services put under the state’s control. (Vietnamnet.vn)

Notable Corporate Events

Vicostone JSC (VCS VN, HNX) – Dividend Payment: VCS has set 07 Dec to be the record date for paying the 2020 cash dividend of VND2,000/share, based on a company’s statement. The payment will be made on 16 Dec. (Ndh.vn)

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