The AGM season peaked in April as more than 900 companies already held their AGM.
Key takeaway from Rong Viet Securities is most companies believe their business will find difficulty to grow at 2017–2018 growth rates. Based on rough estimates, planned revenue growth (among 925 listed companies) has gradually decreased from 26% in 2017, to 18% in 2018, and to 17% in 2019. Meanwhile, planned PBT growth has gradually reduced from 40% in 2017, to 31% in 2018, and to 12% in 2019.
The most obvious supportive event is MSCI’s May 2019 semi-annual review later this month. If MSCI announces to include Kuwait into the MSCI Emerging Market Index, the proportion of Vietnam in the MSCI frontier 100 index will be increased to 30% (currently 17%). If so, there may be around USD 60-70 Mn from funds tracking MSCI Frontier to flow into Vietnam.
Although this is unlikely to move the VNIndex in a meaningful way, the news may help to support overall market sentiment.
In the short term, we believe the market is facing more threats than opportunities. First, negative news from US-China negotiations may put pressure on global stock indices (especially S&P500, DJ, and Nasdaq) given those indices rallied strongly in the first months of 2019. Second, Vietnam macro indicators have been weakening in recent months. These factors may, directly and indirectly, affect the Vietnamese equity market.
As such, we believe it is difficult for the market to form an uptrend in May 2019. Having said that, a correction in May would offer a good point to accumulate stocks. Some ideas we suggest for this time are big companies (included in VN30) with strong fundamentals and attractive relative valuations compared to their potential growth in upcoming years.