As a result of negative news from the extended US-China trade war and Huawei’s CFO’s arrest, the VNIndex closed at 952.04 pts, down 0.68% WoW. Since the start of the month, the VNIndex increased 2.75%; however, it had increased 2.7% on the first day of December, meaning it almost stayed flat for the remaining 9 trading days.
The VNIndex was mainly impacted by some large caps, especially the VN30 group which fell 1.16% WoW. CTG was the biggest loser this week with 7% WoW on the news that it is the biggest lender to a company called Decson, a delisted construction company, which is now under bankruptcy status.
Furthermore, VJC and HPG both declined ~3% WoW and were heavily net sold by foreigners on Friday.
ACV managed to increase 4.3% this week, despite foreign net selling. Its liquidity unexpectedly improved, with an average of nearly 145,000 shares per day in 4 latest days, 2.5 times higher than its 1-month average.
Finally, the Vinafund’s VN30 ETF (HOSE: E1VFVN30) has increasingly gained investor attention due to capital inflow from Korea in recent months, and the latest USD151mn inflow from Thailand, via Depository Receipts, issued by a Thai brokerage house, and listed on the Security Exchange of Thailand (SET). With such sizeable inflows many shares in the VN30 basket are expected to increase.
Liquidity on the HOSE hasn’t yet improved. Daily matched value fluctuated around VND2,700bn, lower than last week’s average of VND3,363bn.
Vietnam is attracting Foreign Direct Investments (FDI) thanks to its low wages, high quality labor force and geographical proximity to the supply chain of regional producers, especially in the electronics sector. FDI continues to flow into Vietnam and the ~7% of GDP in 2018, is helping stabilize domestic currency and boost domestic consumption. The New Year is around the corner and I believe high probability external factors will impact Vietnam more than internal factors: US-China trade war, FED rate rises, USD increasing, and EURO zone deleveraging.
However, I think that given some steep declines in certain stocks, there will be some interesting opportunities to pick up. More on this in the coming days…