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Desipte the contraction, the VNIndex confirms the short-term uptrend as the index closes above the 1,000-pts threshold. Therefore, traders may hold a long position on leading stocks.

Long position on VN30F2212 should be held and stop the loss when there is the closing price below 945 pts level. For new long positions, traders should wait for the short-term consolidation phase in order to capture the better entry. (Hourly chart)

The VNIndex’s downtrend is dominant in the short term as the new bottom is below the 1,000-pts threshold.

Market ended up to be net bought. Real Estate, Financials, and Consumer Staples, focusing on KDH, VHM, SSI, VND, BID, DGC, and VNM. With ETF flow, inflow remained at Vietnam. Net inflow was USD76mn. The positive flow of money was mainly driven by the strong demand on Fubon.

The total revenue growth momentum of listed garment companies was maintained in 3Q22 when posting 27.0% compared to 25.8% in 2Q22. the earnings growth pace spiked from 22.6%% yoy in 2Q22 to 59.0% yoy in 3Q22 thanks to the low base effect as the Southern region was in a lockdown period in 3Q21. Whereas, listed yarn makers witnessed decent growth figures in 3Q22. Specifically, the revenue growth pace in 3Q22 was 16.7% yoy compared to only 5.5% yoy in 2Q22. Net profit growth of yarn companies also jumped to 12.7% yoy in 3Q22 from 1.2% yoy in 2Q22.

Revenue of ICT/Jewelry/Automobile/Airport retailers in 3Q22 respectively surged by 35.3%/700%/176%/700% yoy driven by the recover from extreme closure during the lockdown in 3Q21. Retailers and retail lessors are hectic preparing for the largest sale season in the year, including the Single Day 11/11, Black Friday 25/11 and Christmas 24/12.

In 3Q22, hydropower generators’ revenue and NPAT-MI went up 58% yoy and 126% yoy thanks to La Nina. The coal and input gas prices in 2023F are projected to slow down compared to the towering price in 2022. Coupled with the waning La Nina, we believe that EVN will mobilize thermal power as the alternative for shrinking hydropower output in 2023F.

Breweries led F&B’s revenue and earnings growth in 3Q22, the aggregated revenue and earnings growth of 14 listed brewery producers accelerated sharply in 3Q22 compared to a low base in 3Q21. The revenue accelerated to 84% yoy compared to 21.9% yoy in 2Q22. Besides, beer producers achieved brisk net profit growth of 160% yoy compared to 60.6% yoy in 2Q22.

In Sep and Oct 2022, hydropower output surged 17% yoy thanks to La Nina effect. Coal-fired power volume dropped to 14.9bn kWh (-6% yoy) owing to surging global coal price (+105% yoy) and tight coal supply. As La Nina is expected to wane since early 2023F, we believe EVN will mobilize thermal power as the alternative for shrinking hydropower output in 2023F.

The downtrend is dominant in the short term as the VNIndex closes the 1,000-pts threshold. Therefore, traders should stay on the sideline and wait for the next signals.