Research Center

Bullish momentum is still active. The current bullish swing could support the long positions but new long positions are not recommended. New positions should be placed if there is the minor correction or the short-term range bound to capture the good risk/reward ratio. Thus, traders should stay on the sidelines in order to capture the best bid/offer (Hourly chart).

The stock market moves in the narrow range around the reference point while the liquidity remains at a high level, indicating the ongoing tug-of-war between buying and selling activities. However, the uptrend is still positive as the VNIndex maintains close above the 50-period moving average. Therefore, investors should hold long positions and wait for the next signal.

2Q23 PBT stayed flat at -1.2%yoy (to VND2,741bn) due to a high provision expense (86%yoy). 2Q23 total credit rose up 9.3% YTD to VND293,129bn, nearly equals to 1Q23’s 9.0% YTD and the 1st credit quota of 10.5%. In 1H2023, HDB focused on lending to the commercial loan rather than retail loan and consumer finance. Consolidated 1Q23 NIM fell slightly to 5.0% (vs 5.1% in 2Q22 and 1Q23). 2Q23 NFI climbed 45%yoy (VND1,337bn). 2Q23 CIR maintained at 35% (vs 2Q22’s 36%). Q23 NPL (2-5 group) and NPL (3-5 group) accelerated to 7.2% (vs. 1Q23’s 5.1%) and 2.2% (vs. 1Q23’s 1.8%) respectively.

The stock market increases strongly with the second consecutive session in which the VNIndex gains over 1%. Moreover, the VNIndex also surpasses the resistance level of 1,240-pts with high liquidity, showing bullish signals. Therefore, investors should hold long positions and wait for the next signal.

The trading interest has started to spread to all cover warrants which have different underlying assets as well as trading activity also surged across groups. This is the sign for the active market.

Minor correction has begun. New positions should be placed if there is the minor correction or the short-term range bound. Thus, traders should stay on the sidelines in order to capture the best bid/offer (Hourly chart).

In general, outflow across Vietnam’s ETF came back strongly while demand also experienced to increase in other major ETFs. In this case, selling pressure may present the next time, however, an expectation that demand will still maintain on some major ETFs in the context that the stock market is showing positive movements.

Based on our data collected from 26 listed companies in the agriculture sector, revenue rose by 19% yoy to VND27.2tn, mainly contributed by the surging revenue of crop producers by 20% yoy, and 18% yoy in feeding companies. We anticipate the rice export turnover will keep rising on quarterly and yearly basis in 3Q23, base on following catalysts (1) Russia’s exit from Blacksea Grain Initiation (2) El Nino threatens to drag the yield down and (3) India banned non-bastima rice, addition to the ban of 25% broken rice export and 30% tax imposed for non-bastima rice since Sep-2022.

The money market continues to witness the persistence of super-low interbank rates for the fourth consecutive week, accompanied by only marginal improvement in the lending performance of the banking system. The SBV has maintained its inactivity in the OMO for the second consecutive month, driven by excess liquidity and the government's preference for easing measures. The USDVND exchange rate remains under upward pressure as demand for carry trade activities increases, primarily due to the negative spread in interest rates between the VND and USD. Additionally, the uptrend in U.S. and Japanese G-bond yields exerts further pressure on the exchange rate.

In 2Q23, the growth rate of the firms in the VNINDEX was almost zero, bringing the trailing PE to 14.5x. In the short term, we don’t think the PE level to be attractive for trading activities when (1) the figure has reached the average PE of VNINDEX in the period of 2018-23 and (2) it also points out the current return of VNIndex investment is not more attractive than the deposit savings (the current spread by VNIndex’s E/P and deposit rate is only 0.6%.