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Vietnam's money market this week shows a modest but implicit move even just with two trading days. On one hand, interbank rates tend to increase when the liquidity condition seems to need more time to stabilize after a long holiday. On the other hand, USDVND is flat although one more 25bps increase in the Fed fund rate was released. Furthermore, the 10-year G-bond yield declined for the fourth consecutive week although. Therefore, we predict that participants might await more easing signals from the monetary authority after a depressed set of economic indicators for April.

We tuned in to HDB’s analyst meeting on May 9 which featured the strategical visibility on the group and shed some light on its 1Q23 operational updates. HDB’s 1Q23 consolidate net profit slightly increased to VND2,194 (+8.6%YoY). 1Q23 Consolidated NPL slightly edged up to 1.8% (1Q22: 1.6% and 4Q22: 1.7%). However, the NPL was still below the 2023 target of 2%. 1Q23 consolidated NIM was 5.1%, lower than 4Q22’s 5.2% but higher than 1Q22’s 4.8%.

Traders should stay on the sidelines in order to avoid false trading signals.

The VNIndex is still above the threshold of 1,050 points, but the risk is still present. Investors need to be more careful with their investment decisions.

According to Customs, in Apr, total fertilizer export volume was 131,913 tonnes (-11.5% yoy, +4.2% mom), equivalent to USD48mn (-52.9% yoy, -12.7% mom). Total urea/NPK production in Apr was 153,200/385,500 tonnes (-22.7%/+47.5% yoy, -27.3%/+22.7% mom), respectively. Overall, Apr fertilizer production was 654,200 tonnes (+7.2% mom). +13.1% yoy). The Apr urea domestic market price was trading at around VND9,500/kg (-1.0% mom, -45.7% yoy and -22% YTD).

This quarterly earnings report on Vietnam steel production is intended to track the earning growth trend in the steel market. We witnessed a turn-around of earnings in 1Q23. Although the turn-around was mainly attributed by the reversal of inventories provision, high-cost inventories pressure was believed to be fully relieved. We expect to continue to see the weak demand in 2Q23F but slight improvement compared to 1Q23. We forecast the total sales volume in 2Q23F will be 6.1mn tonnes -6% yoy, +10% qoq.

This quarterly earnings report is a wrapped-up note of listed Vietnamese textile producers based on their financial statements. In line with 4Q22, the 1Q23 revenue growth of listed garment companies continuously declined 22.8% yoy and earnings growth dropped further by -71.4% yoy 1Q23. Inventory levels at major foreign retailers like Nike and Adidas have increased since 2H22, which together with slow consumption led to a decrease in orders. That high inventories will unlikely to solve in 2Q23F and the recovery in the orders is hard to happen.

April shows the adverse impact of weak global demand, under the high-interest rate environment, on Vietnam's economy was still effective. Export decline persists this month, even with a higher rate than in March under the weak 1Q23 revenue from GVC leaders whose factories were heavily located in Vietnam, such as Samsung Electronics. Furthermore, industrial production grows modestly from reducing significantly in the previous month due to the robust domestic demand. On the upside, inflation continued to be well-controlled and retail sales performed impressively, providing support for economic growth in 2Q23.

Selling pressure has started to slow down but still faded the foreign demand, pushing the market to end up to be net sold. Net sell value was USD20mn. With ETF flow, outflow was active. Net outflow was USD1mn. There is still not a good sign for the stable inflow and outflow could be active in upcoming weeks.

Last week, trading volume dropped due to the holiday, recording at 20.2mn shares, down 50% WoW. By underlying asset, covered warrants which have HPG and STB as the underlying asset continued to attract the most of trading interest from both domestic and foreign investors.